Stanley Black & Decker posts higher margins, cash flow in 2025 despite sales dip
Stanley Black & Decker reported stronger margins and profit growth for 2025 as cost controls and pricing actions offset softer sales, while cash generation supported dividends and debt reduction, the company said.
Fourth-quarter net sales fell 1% to $3.7 billion, or down 3% on an organic basis, as lower volume tied to North American retail demand outweighed higher pricing and favorable currency. Gross margin expanded to 33.2% from 30.8% a year earlier. Adjusted gross margin rose to 33.3%.
Earnings per share were $1.04 in the quarter, compared with $1.28 a year earlier. Adjusted earnings per share were $1.41. The company generated $956 million in operating cash flow and $883 million in free cash flow during the quarter.
For the full year, net sales declined 2% to $15.1 billion, or down 1% organically. Gross margin rose to 30.3% from 29.4% in 2024, while adjusted gross margin increased to 30.7%. Full-year earnings per share were $2.65, with adjusted earnings per share of $4.67.
Operating cash flow for the year totaled $971 million and free cash flow reached $688 million, helping fund about $240 million in debt reduction.
President and CEO Chris Nelson said the company delivered growth in margins and net income while strengthening its balance sheet despite a “dynamic environment.” He said the company remains focused on long-term financial targets heading into what could be another uncertain year in 2026.
The company said its Tools and Outdoor segment posted fourth-quarter sales of $3.16 billion, down 2% year over year, as volume declines offset price increases. Segment margin improved to 13.2%. The Engineered Fastening segment reported a 6% sales increase to $524 million, driven by aerospace and automotive demand, with margin rising to 12.1%.
Stanley Black & Decker also said it reached its $2.1 billion savings target under a global cost reduction program launched in 2022. The initiative generated about $120 million in incremental fourth-quarter savings.
In December, the company agreed to sell its Consolidated Aerospace Manufacturing business for $1.8 billion in cash. Net proceeds of roughly $1.5 billion to $1.6 billion are expected to go toward debt reduction. The deal is expected to close in the first half of 2026, pending regulatory approval.
Looking ahead, the company projects 2026 earnings per share of $3.15 to $4.35 on a GAAP basis and $4.90 to $5.70 on an adjusted basis. It expects free cash flow of $700 million to $900 million.
