Stanley Black Exhibits Strong Prospects Despite Persisting Headwinds

Stanley Black & Decker, Inc. SWK is gaining from its multi-year global cost-reduction program, aimed at resizing the organization, lowering inventory levels and optimizing the supply chain to strengthen profitability and position it for sustainable long-term growth. Launched in mid-2022, the program has delivered approximately $1.8 billion in pre-tax run-rate savings and reduced inventory by more than $2 billion.

It is worth noting that, in the third quarter of 2025, SWK achieved approximately $120 million in pre-tax run-rate cost savings. The program is expected to continue taking out costs over the next few quarters. The company expects to generate pre-tax run-rate cost savings of $2 billion by the end of 2025, with an adjusted gross margin of more than 35% in the long term. Of the $2 billion savings, $1.5 billion is expected to be achieved from the company’s four core supply-chain transformation initiatives of operations excellence, material productivity, footprint actions and complexity reduction.

The company solidified its product portfolio and leveraged business opportunities through asset additions. In December 2021, SWK acquired two leading outdoor power equipment providers—an 80% stake in MTD Holdings and Excel Industries. These acquisitions expanded Stanley Black’s cordless electric outdoor power equipment portfolio. With rising demand for home and outdoor products and the growing shift toward electrification, the addition of MTD Holdings and Excel Industries has significantly enhanced the company’s position in the roughly $25 billion outdoor products market.

Stanley Black is committed to rewarding its shareholders through dividend payments and share buybacks. In the first nine months of 2025, the company paid $374.3 million in dividends, up 1.9% year over year. It also bought back shares worth $14.7 million in the period. Also, in July 2025, SWK hiked its dividend by a penny to 83 cents per share (annually: $3.32 per share).

SWK’s Zacks Rank

In the past month, this Zacks Rank #3 (Hold) company’s shares gained 4.2% compared with the industry’s 2.3% growth.

However, SWK is plagued by softness across both segments. The Tools & Outdoor segment is witnessing weakness owing to soft demand for outdoor products and tariff-related shipment disruptions. Also, persistent softness in the DIY market and tepid demand for hand tools remain concerning. Despite signs of improvement, softness in the automotive end market, owing to headwinds in the global automotive OEM light vehicle production, is affecting the Engineered Fastening segment. Also, weakness in the general industrial market and the divestiture of the infrastructure business have been impacting the segment’s sales.

Stanley Black is dealing with escalating expenses as management has stepped up investments in innovation and growth initiatives. In the first nine months of 2025, its SG&A expenses increased 1.8% year over year to $2.51 billion. The metric, as a percentage of net sales, was high at 22%. Also, the company’s cost of sales, as a percentage of net sales, was high at 70.6%.

Stocks to Consider

Some better-ranked companies are discussed below.

Crane Company CR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CR delivered a trailing four-quarter average earnings surprise of 9.3%. In the past 60 days, the Zacks Consensus Estimate for Crane’s 2025 earnings has increased 2.9%.

Helios Technologies, Inc. HLIO presently sports a Zacks Rank of 1. HLIO delivered a trailing four-quarter average earnings surprise of 16.8%.

In the past 60 days, the consensus estimate for Helios’ 2025 earnings has increased 2.5%.

Dover Corporation DOV presently carries a Zacks Rank of 2. DOV delivered a trailing four-quarter average earnings surprise of 3.9%.

In the past 60 days, the consensus estimate for Dover’s 2025 earnings has increased 1.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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