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Key Takeaways
- Stanley Black & Decker said Wednesday it is working to raise prices and shift its supply chain in response to the Trump administration's tariffs.
- The tool maker increased prices once before It expects to achieve this again by the beginning of the third quarter.
- The company's first-quarter results topped estimates, but the tariff concerns sent its shares lower Wednesday.
Stanley Black & Decker (SWK) shares fell Wednesday as the power tool maker anticipates the Trump administration’s tariffs negatively affecting its profits this year as it alters its supply chain and raises prices.
Donald Allan, CEO, said that “in light of the current climate, we are speeding up adjustments to our supplies chain and exploring all our options as we seek minimize the impact of tariffs to end users while balancing both the need to protect the business and our innovation for years to follow.” “With that in view, we implemented an early price increase in the month of April and informed our clients that further price action was needed.”
Tariffs expected to create 75-Cent EPS hit
The maker of DeWalt, Craftsman and its own name-brand tools, says it projects that tariffs, and the adjustments it makes to respond, will negatively affect earnings per share (EPS), by 75 cents, for the full year. The company anticipates that its second price increase will go into effect in the summer’s third quarter.
“If the demand climate shifts, we anticipate adjusting our costs and inventories to protect earnings and cash flow while preserving our investments in growth,” said CFO Patrick Hallinan.
The tool maker topped analyst expectations Wednesday with its $3.74billion in sales, and adjusted EPS each of 75 cents.
Stanley Black & Decker shares were down 4% in recent trading at $58.76 and have lost more than a quarter of their value since the start of the year.
