Stanley Black & Decker reports Q1 EPS of $0.39, completes $1.8B CAM sale, raises GAAP guidance

The company disclosed its first quarter 2026 financial results through a press release. The 8-K filing itself does not contain the actual financial figures or performance metrics, only the announcement that results were released.

Stanley Black & Decker reported first quarter 2026 net sales of $3.8 billion, up 3% year-over-year but flat organically. GAAP EPS was $0.39 and adjusted EPS was $0.80. Gross margin improved 20 basis points to 30.1% on a GAAP basis, though adjusted gross margin declined 20 basis points to 30.2% as pricing and operational improvements were offset by tariff expenses and volume deleverage.

Stanley Black & Decker raised its 2026 GAAP EPS guidance to $4.15-$5.35 from prior guidance, reflecting the expected gain on the CAM sale. The company reaffirmed adjusted EPS guidance of $4.90-$5.70, representing 13% growth at the midpoint versus 2025. Free cash flow is expected at $500-$700 million including CAM-related taxes and fees, or $700-$900 million excluding those payments.

Following the CAM divestiture and debt reduction, Stanley Black & Decker indicated it expects to pursue capital allocation focused on shareholder value creation, specifically mentioning anticipated share repurchases. This signals a shift toward returning capital to shareholders after strengthening the balance sheet.

The Tools & Outdoor segment grew 2% with sales of $3.3 billion but saw organic revenue decline 1% due to North American retail softness, with adjusted segment margin declining 90 basis points to 8.7%. The Engineered Fastening segment performed strongly with 10% growth and 7% organic growth driven by aerospace and automotive, with adjusted segment margin expanding 190 basis points to 12.0%.

Stanley Black & Decker reported Q1 2026 net earnings of $59.6 million ($0.39 per diluted share), down from $90.4 million ($0.60 per diluted share) in Q1 2025. Revenue increased modestly to $3,846.4 million from $3,744.6 million. The earnings decline reflects higher restructuring charges ($44.9 million vs. $1.2 million), asset impairment charges of $22.7 million related to a product line exit, and lower operating income despite improved gross margin.

The company recorded $22.7 million in asset impairment charges in Q1 2026 related to exiting a Tools and Outdoor product line and closing an associated plant. This represents a strategic decision to discontinue certain operations and resulted in a write-down of related assets.

Stanley Black & Decker completed the sale of its Consolidated Aerospace Manufacturing (CAM) business on April 6, 2026. During Q1 2026, CAM contributed $117.0 million in net sales and $22.0 million in segment profit to the Engineered Fastening segment before the sale closed. The assets and liabilities were classified as held for sale on the balance sheet.

The company generated negative free cash flow of $447.3 million in Q1 2026 (improved from negative $485.0 million in Q1 2025). Operating activities used $388.8 million in cash, primarily driven by a $388.8 million increase in working capital. This seasonal pattern is typical for Q1 but represents a significant cash outflow.

Stanley Black & Decker paid down $500.1 million in long-term debt during Q1 2026 while increasing short-term commercial paper borrowings by $1,145.4 million. This represents a shift from long-term to short-term debt financing. Short-term borrowings increased from $605.6 million at year-end 2025 to $1,743.0 million at quarter-end 2026.