Stanley Black & Decker was sinking in premarket trading after the tool maker missed analysts’ earnings and revenue expectations for the second quarter and cut guidance for the full year.
Stanley Black & Decker (ticker: STK) reported adjusted earnings in the second quarter of $1.77 a share, lower than Wall Street estimates of $2.13, according to FactSet. Revenue for the second quarter of $4.39 billion also came in below estimates of $4.74 billion. Stanley Black & Decker posted adjusted earnings of $3.08 per share and revenue of $4.3 billion in the second quarter of 2021.
The tool company said it now expects adjusted earnings for the full year of between $5 to $6 a share, down from the previously anticipated $9.50 to $10.50 a share.
High costs and softening demand hit the company hard.
“While the macroeconomic environment — including inflation, rising interest rates and significantly slower demand in late May and June — drove the majority of the challenges we faced this quarter, these headwinds underscore the need to accelerate our strategic transformation,” Chief Executive Donald Allan Jr . said in the earnings release.
Shares dropped 15.5% in premarket trading Thursday to $99.27. Coming into Thursday, the stock has fallen 38% this year.
Allan added in the earnings release that with the softening demand environment accelerating rapidly during the last portion of the quarter “we began taking immediate corrective cost actions, which we are continuing to implement.”
“The entire organization is focused on taking the necessary steps to reduce our inventory to generate cash flow, and to resize our cost base through corporate simplification, operational optimization and supply chain transformation,” Allan said. “We are reprioritizing investments across our businesses and shifting resources to where we expect they will have the greatest positive impact for our customers, partners and end users.”
Write to Angela Palumbo at [email protected]
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