Power Tool Industry March 2019
Stanley Black & Decker
Barclays Industrial Select Conference:
They have long-term financial objectives of 4% to 6% organic growth, 10% to 12% total revenue growth and EPS growth of 10% to 12%.
Commodity inflation, tariffs and currency negatively affected margins last year, and they will be discussing some significant margin enhancement initiatives at their Investor Day in May. It is not realistic to think that they are going to recover all of the impact of headwinds through price increases.
Analysts commented that Stanley’s outlook on the US economy seems to be more negative than the outlook of many other companies they have heard from in the past two months. CFO Don Allen said that they have businesses that are tied to the auto production industry and their Tools business is tied to US housing, both areas being pressured. That’s what accounted for them dropping their organic growth target from 5% to 4% for this year. They project the Tools business will grow between 5% and 6%.
Competition in the tools market is very intense. There are very strong competitors, but they all make different decisions based on different goals and objectives. It does appear that the commodity cycle is starting to turn around and currency is stabilizing. No one knows where tariffs are really going.
They promised a significant new innovation in the Tools business within the next 12 months. They want to be known as drivers of innovation.
SB&D is opening a new 1.2-million-square-foot regional distribution center in Alliance, Texas that will service central and southern states. The center will employ more than 300 workers when it opens in March.
SB&D recalled more than 120,000 DeWalt drills due to a potential shock hazard. According to the Consumer Product Safety Commission (CPSC) the drill’s wiring can contact internal moving parts. The recall is of drill models DWD110 and DWD112 models marked with an “X” after the date code. The drill was sold at The Home Depot, Lowe’s and other stores nationwide as well as online through Amazon from September 2017 through November 2018.
Q4 revenue rose 12% to $785.5 million. Buildings and infrastructure revenue rose 40% to $287.0 million. CEO Steven Berglund said that the robust fourth quarter closed out a record-setting year for the company. Revenue growth was aided by the strong performance of recent acquisitions.
Full year revenue for fiscal 2018 was up 17% to $3.1 billion, and Buildings and Infrastructure revenue was up 31% to $1.1 billion.
Trimble is introducing a new wearable hard hat compatible device that enables workers in safety-controlled environments to access holographic information on the worksite. The new HoloLens 2 was created by Trimble’s Mixed Reality group in partnership with Microsoft and provides workers with greater access to 3D models.
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