Stanley Black & Decker (NYSE: SWK) recently reported its fourth quarter and full-year 2025 financial results. In the fourth quarter, the company had net sales of $3.7 billion, which was down 1% compared to the previous year, with organic sales down 3%. However, the gross margin increased by 240 basis points to 33.2%, and adjusted gross margin increased by 210 basis points to 33.3%. Additionally, the company reported earnings per share (EPS) of $1.04 and adjusted EPS of $1.41 for the quarter.
For the full year 2025, net sales were $15.1 billion, down 2% compared to the prior year, with organic sales down 1%. The gross margin increased by 90 basis points to 30.3%, and adjusted gross margin increased by 70 basis points to 30.7%. The company reported EPS of $2.65 and adjusted EPS of $4.67 for the full year.
The tools & outdoor segment saw a 2% decrease in net sales year over year, while the engineered fastening segment experienced a 6% increase in net sales. The company's global cost reduction program generated approximately $120 million of incremental pre-tax run-rate cost savings in the fourth quarter, and since its inception in mid-2022, the program has generated approximately $2.1 billion of pre-tax run-rate savings.
Furthermore, the company announced a definitive agreement to divest the consolidated aerospace manufacturing (CAM) business for $1.8 billion in cash, with net proceeds expected to be in the range of $1.525 billion to $1.6 billion, which will be utilized to reduce debt.
Looking ahead to 2026, the company expects EPS to be in the range of $3.15 to $4.35 on a GAAP basis and in the range of $4.90 to $5.70 on an adjusted basis, representing growth of 42% and 13% respectively at the midpoint of each range. The company is targeting free cash flow to be in the range of $700 to $900 million, reflecting an increase of 16% at the midpoint.
The market has reacted to these announcements by moving the company's shares 0.25% to a price of $84.61. For more information, read the company's full 8-K submission here.
