Stanley Black & Decker saw Q2 revenues of $4 billion, down -3% versus Q2 2023. Organic growth hit 1% led by DEWALT, Engineered Fastening and Outdoor Products. Aerospace fasteners were highlighted as a growth driver amidst a weak consumer backdrop.
Revenues were hit thanks to previously announced infrastructure divestiture and currency.
Stanley Black & Decker's Industrial net sales were down 20% vs Q2 2023 as the Infrastructure divestiture (-20%) and currency (-2%) was partially offset by price (+2%). Engineered Fastening organic revenues were up 2%, driven by aerospace growth which offset market softness in automotive and general industrial. The Industrial segment margin was 13.5%, up 190 basis points versus prior year. The adjusted segment margin was 13.5%, up 50 basis points versus second quarter 2023 due to price realisation and cost control.
Tools & Outdoor net sales were flat versus second quarter 2023 with DEWALT and outdoor leading volume gains (+2%) that were partially offset by price (-1%) and currency (-1%). Regional organic revenues saw North America up 1%, Europe down -3% and rest of world up 5%. Second quarter US retail point-of-sale demand was up modestly versus the prior year led by outdoor growth and recaptured DEWALT cordless promotions. The Tools & Outdoor segment margin was 9.0%, up 610 basis points versus prior year. Adjusted segment margin was 10.4%, up 590 basis points versus second quarter 2023, primarily due to lower inventory destocking costs, supply chain transformation benefits and lower shipping costs, which were partially offset by growth investments.
Donald Allan, Jr., Stanley Black & Decker's President & CEO, commented: "As we look to the back half of 2024, we expect mixed demand trends across our markets. With that in mind, we remain focused on implementing supply chain improvements designed to reshape our cost structure and expand margins, delivering earnings growth and generating strong cash flow. We are continuing to reinvest a portion of the savings to fund new growth investments intended to further strengthen our powerful brands, accelerate innovation and deploy differentiated market activation to capture compelling long-term opportunities in our industry.
"Stanley Black & Decker continues to become a more streamlined business, built on the strength of our people and culture, with an intensified focus on our core market leadership positions. I am confident that by executing our strategy, we are positioning the Company to deliver higher levels of organic revenue growth*, profitability and cash flow to drive strong long-term shareholder returns."
Looking ahead, Stanley Black & Decker remains focused on its infrastructure changes, which are expected to boost future growth and performance.
Patrick D. Hallinan, Executive Vice President and CFO, said: "In the first half of 2024 we enhanced gross margins versus the prior year and accelerated working capital improvements, which together with proceeds from the Infrastructure divestiture, reduced $1.2 billion debt and further strengthened our balance sheet. Looking forward, we remain focused on executing our supply chain improvements to further improve gross margin and earnings in the second half of 2024 and our progress to date supports our improved full year adjusted earnings and free cash flow outlook. We remain confident that our actions to drive toward our target of 35%+ adjusted gross margins while funding additional organic revenue growth* investments will continue generating positive results. Our top priorities remain delivering margin expansion, cash generation and balance sheet strength to position the Company for long-term growth and value creation."
