Stanley Black & Decker Inc. (NYSE:SWK) stock fell in premarket trading Wednesday after the company reported mixed second-quarter 2026 results, with earnings topping Wall Street estimates while revenue came in slightly below expectations.

The company reported adjusted earnings of $1.57 per share, exceeding the analyst consensus estimate of $1.22, according to Benzinga Pro. Revenue totaled $3.961 billion, narrowly missing the Street estimate of $3.967 billion.

Earnings And Margins

Revenue was essentially flat year over year at $3.96 billion, while organic revenue increased 3% on higher volumes. Foreign exchange added about 1% to reported sales.

GAAP diluted earnings per share increased to $2.33 from 67 cents a year earlier. Net earnings rose to $351.3 million, while adjusted EPS improved from $1.08 to $1.57.

Results included an approximately 17-cent-per-share benefit from net tariff refunds. Earnings also benefited from a $273.7 million gain on business sales, primarily related to the CAM divestiture.

GAAP gross margin expanded 600 basis points to 33%, while adjusted gross margin increased 620 basis points to 33.7%. Adjusted EBITDA rose to $445.7 million, lifting the adjusted EBITDA margin to 11.3%.

Segment Performance

Tools & Outdoor revenue increased 3% to $3.564 billion, with organic sales also rising 3%. The company said power tools and its U.S. retail business returned to year-over-year growth. Adjusted segment margin expanded 380 basis points to 11.8%, driven by productivity improvements, favorable product mix and tariff refunds.

Engineered Fastening revenue declined 18% to $396.4 million, reflecting the CAM divestiture. Organic revenue, however, increased 3%. Adjusted segment margin improved 220 basis points to 13%, supported by productivity initiatives and favorable automotive volume and mix.

Cash Flow And Capital Allocation

Operating cash flow increased to $763.1 million from $214.3 million a year earlier. Free cash flow rose to $698.2 million from $134.7 million.

The company ended the quarter with $592.4 million in cash and cash equivalents and approximately $4.76 billion in total debt. During the quarter, Stanley Black & Decker reduced debt by $1.7 billion and repurchased about 3.2 million shares for $250 million.

Outlook

Stanley Black & Decker expects full-year 2026 net sales to be roughly flat year over year, implying revenue of about $15.13 billion, compared with the Street estimate of $15.14 billion.

The company raised its full-year 2026 GAAP EPS guidance to a range of $4.60 to $5.45 from its previous outlook of $4.15 to $5.35. The updated range compares with the analyst consensus estimate of $4.97.

It also increased its adjusted EPS outlook to $5.20 to $5.80 from $4.90 to $5.70, above the Street estimate of $5.37.

Free cash flow guidance was raised to $600 million to $800 million. For the third quarter, the company expects revenue of about $3.7 billion and adjusted EPS of $1.50 to $1.60.

Management expects adjusted gross margin in the second half of the year to be between 34% and 35%, representing an improvement of about 200 basis points. The outlook does not include any additional tariff refunds because of uncertainty around their timing.

SWK Price Action: Stanley Black & Decker shares were down 2.23% at $92.09 in the premarket trading on Wednesday, according to Benzinga Pro data.

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