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Stanley Black & Decker At the Morgan Stanley Laguna Conference: Their top two priorities are getting back to 35%+ margins and having a healthy balance sheet. The progress they’ve made hasn’t been due to deflation. It’s come from the collective efforts of all of their teams, not just the operations and supply chain teams. Everyone is focused on “attacking gross margin very maniacally.” They are confident they will get to 35% margins by the end of next year. They will end this year in the low 30s. They don't think 35% is necessarily an endpoint. They identified 70,000 to 80,000 SKUs they wanted to eliminate that were tied to about $50 million of revenue. They’re through at least two-thirds of the way through that process. For mergers and acquisitions (M&A) they look at strategic fit, business readiness and how friendly the M&A market is. Based on all that, they think the market opportunities are minimal at this point; if they did go after something, it would probably be small. They see the greatest avenues in their Tools & Outdoors (T&O) business in power tools and handheld outdoor. If they identified something that was a good complement or would provide good synergies they’d be interested. On the industrial side, automotive and solar are of interest. Tools and Outdoor turned positive in Q2 for the first time in two years. The underlying tools demand, Pro and DIY together, has been soft and choppy all year long and remains so. Pro is marginally stronger. The consumer has been pretty weak. The moderator commented that there are two players, including DeWalt, that have differentiated themselves on the breadth of their systems, the amount and the quality of the innovation they bring to the market and the ability to pursue various channel and geographic opportunities around the world. They are deep in their strategic planning cycle and doing a lot of end market outreach to channel partners, the big construction companies, small construction companies and end users. They believe there is a true willingness to pay for productivity enhancements, safety enhancements or durability enhancements. While DeWalt is regarded as a top brand, they believe the professional user base is still looking for more on those fronts and has a willingness to pay. Productivity and durability are the things that customers really want and are stronger brand pillars than just pure battery. There are also applications where safety is a prime concern. DeWalt has been growing at about an 8% compound annual growth rate over the last ten years. They’ve had five quarters in a row of low to mid-single-digit growth in what they characterize as a down market. Other News: Craftsman is sponsoring the Ultimate Garage Giveaway. Now through November 1, people can enter for a chance to win $10,000 worth of select Craftsman products and a new Toyota Tacoma TRD Off-Road truck. The winner will also get a one-on-one design consultation with Craftsman brand ambassador and HGTV personality Cristy Lee. Craftsman has also introduced a new virtual garage configurator, an online tool that helps consumers explore different Craftsman storage solutions and layouts to create their ideal garage space. According to a recent Craftsman survey, 36% of Americans say their garage is so cluttered they can no longer park vehicles inside. However, more than 75% of homeowners believe their garage could become the most productive space in their house. DeWalt awarded $4 million in Grow the Trades grants to 166 organizations. The Grow the Trades grant program is part of DeWalt’s $30 million by 2027 commitment to close the skilled trades gap by helping provide greater accessibility and resources for trades training. In addition, DeWalt is encouraging high school seniors planning to enroll at an accredited two-year college, apprentice program or vocational technical school to apply for a 2025 DeWalt Trades Scholarship. Now in its sixth year, the program has awarded $850,000 in scholarships across the United States and Canada. SB&D has retained Goldman Sachs to test the market for a 2025 sales of their Engineered Fastenings Division, according to multiple inside sources. Engineered Fastenings sells tools used to assemble equipment in a wide range of industries, including aerospace, automotive, construction, energy and medical under brand names including Nelson, Avdel, Integra, Optia and Tucker. The group represents about 60% of SB&D’s industrial Engineered Products Division. In May, on SB&D's Q1 earnings call, CEO Donald Allan cited the group among the units they might consider as they conduct "a little pruning” of non-core assets. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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