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Stanley Black & Decker Q1 revenue fell 2% to $3.9 billion. Growth in DeWalt and Engineered Fastening was more than offset by lackluster consumer and DIY demand. Q1 Conference Call with Analysts: Q1 revenue for Tools & Outdoor fell 1% organically to $3.3 billion. Tools & Outdoor organic revenue is expected to be plus or minus low single digits in 2024, most likely below flat, consistent with the total company. North American Tools & Outdoor sales were down 2% organically. Pricing in Tools & Outdoor was relatively flat, consistent with their expectations. Adjusted segment margin was 8.5% Power Tools was up 1.0% organically led by pro-driven growth into DEWALT and international sales. Power Tools also benefitted from a return to historic promotional levels on high-margin DeWalt cordless products. DeWalt is a high-margin product and well-established brand in demand from Pros. They want to make sure they continue to develop innovative products for this segment. They also make significant investments in activation resources that can work with end users and partners in the field to make sure that they understand these products and can launch them successfully. Organic revenue for hand tools declined 7% due to lower DIY demand. The independent dealer channel continues to work through significant on-hand inventory, which pressured shipments in the quarter. They are monitoring POS trends in this channel and currently expect that they can clear their inventory during the 2024 season to set up a stronger 2025. Their global cost reduction program remains on track to result in savings of $1.5 billion by the end of 2024 and $2 billion by the end of 2025. They have captured $1.2 billion in savings to date and remain confident it will support 30% gross margins in 2024, consistent with our guidance. Approximately 80% of the company's revenue is expected to carry 2024 adjusted gross margins in excess of 30% and exit this year at or ahead of initial expectations. Their long-term success will be driven by improved profitability, and consistent market share gains. They believe their share of the tools market is now stable to increasing. Their 2023 point-of-sale data in tools performed better than the category average across the North American home centers, led by DEWALT. They are also improving their fill rates. Ace Hardware named CRAFTSMAN as Vendor of the Year for 2023 and Grainger recognized Stanley Black & Decker with their Partners and Performance Award. They completed the sale of Stanley Infrastructure to Epiroc and used the net proceeds to reduce short-term debt. For 2024 they expect mixed demand trends to persist across their businesses. They are driving supply chain cost improvements and funding investments designed to fuel targeted long-term growth and market share gains across their businesses. They remain focused on generating free cash flow and growing margins. It’s DeWalt’s 100-year anniversary and they highlighted several new DeWalt product introductions. Supply chain transformation initiatives are expected to generate approximately $0.5 billion of savings in 2024. Strategic sourcing remains the largest contributor to savings. They are leveraging savings on the $5 billion of addressable spend across areas such as materials and components, finished goods and indirect expenditures. Lean manufacturing is driving productivity improvements and improving efficiency and effectiveness in their production and distribution facilities. There are lots of initiatives in the pipeline that will deliver efficiency gains in 2024 and beyond. They are optimizing their distribution footprint and redesigning their manufacturing network to leverage centers of excellence and to optimize operations. This is a multiyear program. They plan to exit or transform a number of facilities across the globe during 2024 and 2025. The manufacturing sites they previously announced for closure have ceased production and they expect to exit these sites completely in the near future. They have reduced their reliance on Chinese manufacturing. Back in 2016 when stiff tariffs that are still in place were first introduced, their products sold in the US but made in China accounted for about 40% of US revenue. Today, they account for somewhere between 20% and 25%. TTI/Techtronics Industries Steve Richman is the newly named CEO of TTI. Richman, who led subsidiary Milwaukee Tool for the past 17 years, was promoted to senior group president of TTI in January. No replacement for him as the head of Milwaukee Tool has been named yet. Richman replaced outgoing CEO Joe Galli immediately after Galli announced it was “time to retire” and stated that he believes he is leaving TTI in great hands. Milwaukee Tool will be led by a team of five execs who served on Steve Richman’s leadership team. A spokesperson for Milwaukee Tool said the leadership team has been in place for 16 years and this approach will allow for a seamless transition. They will report directly to Richman. No word yet on where Richman, whose office was at Milwaukee headquarters in Brookfield, will be located. The team includes Shane Moll, group president of power tools, equipment, outdoor power equipment, digital product, platform and product service. Moll will also lead finance, information technology, legal and regulatory functions. Scott Griswold is group president of power tool accessories and outdoor power accessories. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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