What Happened?
Shares of manufacturing company Stanley Black & Decker (NYSE: SWK) fell 2.7% in the afternoon session after the company detailed a challenging macroeconomic outlook and significant tariff impacts during a presentation at Morgan Stanley's Laguna Conference.
The company disclosed it is navigating an $800 million annualized cost impact from tariffs, which it plans to mitigate through pricing strategies, including a second price increase in the fourth quarter. While Stanley Black & Decker is nearing the completion of a $2 billion restructuring program and aims to improve its gross margins, it also acknowledged facing weak consumer demand. The company's forecast for a continued volatile macro environment into 2026 has raised concerns among investors about its near-term profitability and growth prospects.
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What Is The Market Telling Us
Stanley Black & Decker’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 2.7% on the news that investors reacted positively to the ongoing success of the company's global cost-reduction program.
The multi-year initiative, launched in mid-2022, is designed to enhance profitability by resizing the organization, lowering inventory, and optimizing the supply chain. To date, the program has successfully delivered approximately $1.8 billion in pre-tax run-rate savings and has cut inventory levels by over $2 billion. In the second quarter of 2025 alone, Stanley Black & Decker realized about $150 million in savings. The company is on track to achieve its target of $2 billion in pre-tax run-rate savings by the end of 2025, which is expected to support its long-term goal of an adjusted gross margin above 35%.
Stanley Black & Decker is down 3.2% since the beginning of the year, and at $77.29 per share, it is trading 29.8% below its 52-week high of $110.13 from September 2024. Investors who bought $1,000 worth of Stanley Black & Decker’s shares 5 years ago would now be looking at an investment worth $476.04.
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