Stanley Black & Decker (NYSE:SWK) reported fourth-quarter adjusted earnings that came in ahead of Wall Street forecasts on Wednesday, even as revenue failed to meet expectations amid weaker retail demand in North America.
Shares of the tools and outdoor products maker fell about 1.3% following the results.
The company posted adjusted earnings per share of $1.41 for the quarter, topping the consensus estimate of $1.28. Revenue totaled $3.7 billion, below analysts’ expectations of $3.78 billion and down 1% from the same quarter a year earlier. On an organic basis, sales declined 3% year over year.
Stanley Black & Decker said the revenue shortfall was largely driven by a 7% drop in volumes, mainly reflecting softness in North American retail markets. This was partly offset by higher pricing, which added 4%, and favorable currency movements, contributing an additional 2%.
Despite the weaker top line, the company delivered notable margin improvement. Adjusted gross margin expanded by 210 basis points to 33.3% compared with the prior year, supported by pricing actions, efforts to mitigate tariffs, and lower supply chain costs.
“Stanley Black & Decker delivered solid results across our key focus areas in 2025, with continued gross margin and net income growth, strong free cash flow, a strengthened balance sheet, and strategic investments focused on driving sustainable, profitable growth,” said Chris Nelson, President & CEO.
Looking ahead, the company forecast adjusted earnings per share for 2026 in the range of $4.90 to $5.70, implying roughly 13% growth at the midpoint. Free cash flow is expected to land between $700 million and $900 million.
Stanley Black & Decker also announced it has entered into a definitive agreement to sell its Consolidated Aerospace Manufacturing business for $1.8 billion in cash, with the proceeds earmarked primarily for debt reduction.