Industrials
Tools & Accessories
$12.74B
50K
Stanley Black & Decker, Inc. provides hand tools, power tools, outdoor products, and related accessories in the United States, Canada, Other Americas, Europe, and Asia. Its Tools & Outdoor segment offers professional grade corded and cordless electric power tools and equipment, including drills, impact wrenches and drivers, grinders, saws, routers, and sanders; pneumatic tools and fasteners, such as nail guns, nails, staplers and staples, and concrete and masonry anchors; corded and cordless electric power tools; hand-held vacuums, paint tools, and cleaning appliances; leveling and layout tools, planes, hammers, demolition tools, clamps, vises, knives, saws, chisels, and industrial and automotive tools; drill, screwdriver, router bits, abrasives, saw blades, and threading products; tool boxes, sawhorses, medical cabinets, and engineered storage solutions; and electric and gas-powered lawn and garden products. This segment sells its products under the DEWALT, CRAFTSMAN, CUB ADET, BLACK+DECKER, and HUSTLER brands through retailers, third-party distributors, independent dealers, and a direct sales force. The company's Industrial segment provides threaded fasteners, blind rivets and tools, blind inserts and tools, drawn arc weld studs and systems, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, high-strength structural fasteners, axel swage, latches, heat shields, pins, couplings, fitting, and other engineered products; and attachments used on excavators and handheld tools. This segment sells its products through direct sales force and third-party distributors to the automotive, manufacturing, electronics, construction, aerospace, and other industries. The company was formerly known as The Stanley Works and changed its name to Stanley Black & Decker, Inc. in March 2010. Stanley Black & Decker, Inc. was founded in 1843 and is headquartered in New Britain, Connecticut.
Key insights and themes extracted from this filing
The Company reported consolidated annual revenues of $15.8 billion for 2023. This is a decrease compared to the previous year.
The Company's gross profit was $3.933 billion, or 24.9% of net sales. This is a decrease compared to the previous year. The company attributes this to selling through high-cost inventory, production curtailments, and lower volume.
Inventory as of December 30, 2023 was $4.7 billion, down $1.9 billion from its peak at the end of the second quarter of 2022. This is a result of the company's focus on optimizing inventory levels.
The Company is strategically committed to simplifying and streamlining its portfolio to focus on its leading market positions in tools and outdoor, as well as engineered fastening systems.
The Company initiated a business transformation in mid-2022 that includes reinvestment for faster growth as well as the $2.0 billion Global Cost Reduction Program through 2025.
In the near term, the Company intends to direct any capital in excess of the quarterly dividend on its common stock toward debt reduction and internal growth investments.
The Company continues to practice the operating principles encompassed by Operational Excellence, one element of the supply chain transformation.
The Company aims to develop standardized business processes and system platforms to reduce costs and provide scalability.
With a focus on continuous improvement, the Company launched efforts to update its EHS Management System to better align with its current organization and allows the Company to be even more proactive in risk recognition and mitigation at all levels.
The Company imports large quantities of finished goods, component parts and raw materials. Lead times for these items vary significantly and may be further impacted by global shortages of critical components.
The Company faces active competition and resulting pricing pressures. The Company's products compete on the basis of, among other things, its reputation for product quality, its well-known brands, price, innovation and customer service capabilities.
The Company's information systems and data may be vulnerable to cybersecurity threats and incidents which can include uncoordinated individual attempts to gain unauthorized access to information technology systems, sophisticated and targeted measures known as advanced persistent threats, breaches due to human error, malfeasance, or other cybersecurity incidents.
The Company competes on the basis of its reputation for product quality, its well-known brands, its commitment to customer service, its strong customer relationships, the breadth of its product lines, its innovative products and customer value propositions.
The Company encounters active competition in the Tools & Outdoor and Industrial segments from both larger and smaller companies that offer the same or similar products and services or that produce different products appropriate for the same uses.
Certain large customers offer private label brands ("house brands") that compete across a wide spectrum of the Company's Tools & Outdoor segment product offerings.
Working capital turns were 4.2 at the end of 2023, up 0.7 turns from 2022, driven by the Company's focus on optimizing inventory levels via improved supply chain conditions and strategic inventory management.
As a result of this focus and planned production curtailments initiated during the back half of 2022, inventory as of December 30, 2023 was $4.7 billion, down $1.9 billion from its peak at the end of the second quarter of 2022.
The Company plans to continue leveraging Operational Excellence to generate ongoing improvements in working capital turns, cycle times, and customer service levels.
The Company continues to invest in its innovation model with both breakthrough and core innovations and places an emphasis on electrification.
Research and development costs were $362.0 million, $357.4 million and $276.3 million for fiscal years 2023, 2022 and 2021, respectively.
As part of the integration of these businesses into the Tools & Outdoor segment, the Company designed, developed and manufactured battery and electric-powered solutions for professional and residential users.
In terms of capital allocation, the Company remains committed, over time, to returning excess capital to shareholders through a strong and growing dividend as well as opportunistically repurchasing shares.
In the near term, the Company intends to direct any capital in excess of the quarterly dividend on its common stock toward debt reduction and internal growth investments.
On April 23, 2021, the Board of Directors approved repurchases by the Company of its outstanding securities, other than its common stock up to an aggregate amount of $3.0 billion. No repurchases have been executed pursuant to this authorization to date.
The portfolio changes discussed above prompted the Company to re-baseline its ESG data and update its ESG targets to align with the more focused Company and its business priorities and goals, while maintaining continuity with the legacy ESG pillars of people, products, and planet.
To grow the trades, the Company is tailoring its philanthropic efforts to fund trade skill-building initiatives with $30 million pledged by 2027.
To reach this goal, the Company plans to engage two-thirds of its suppliers to set their own Scope 1 and 2 GHG emissions reduction targets by 2027.
The Company generates approximately 38% of its revenues outside the U.S., including 16% from Europe and 12% from various emerging market countries.
The Company manufactures and sells its products in many countries throughout the world. As a result, there is exposure to foreign currency risk as the Company enters into transactions and makes investments denominated in multiple currencies.
A significant portion of the Company's products are sold through home centers and mass merchant distribution channels in the U.S. and Europe. A consolidation of retailers in both North America and abroad has occurred over time and the increasing size and importance of individual customers creates risk of exposure to potential volume loss.