- Stanley Black & Decker, Inc (NYSE:SWK) reported first-quarter FY23 sales declined 11.6% year-over-year to $3.93 billion, missing the consensus of $4.01 billion.
- The sales decline reflects lower volume (-11%), currency (-2%) and the Oil & Gas divestiture (-1%).
- Inventory at the end Q1 was $5.7 billion, down ~$200 million sequentially, due to improved supply chain conditions and planned production curtailments.
- Adjusted EPS was $(0.41), beating the consensus of $(0.73).
- Adjusted gross margin was 23.1%, up 360 bps sequentially, down versus the prior year rate of 31.3%.
- The operating profit declined to $10.4 million (-97% Y/Y) and the margin for the quarter was 0.26%, a decline of 750 bps
- Stanley Black & Decker’s cash used in operating activities for the quarter was $(286.3) million, compared $(1.24) billion a year ago. Free cash outflow was $(354.5) million.
- “Our adjusted gross margin improved from trough levels last quarter, and we believe the adverse margin impact from our targeted production curtailments and destocking will continue to ease in the coming quarters. We are prioritizing cash generation, gross margin improvement and balance sheet strength, and by executing against these priorities, we are positioning the Company for long-term growth and value creation,” CFO Patrick Hallinan said.
- FY23 Outlook: SWK sees GAAP EPS of ($1.65) to $0.60 (prior view ($1.65) to $0.85).
- It Reiterated Its Adjusted EPS guidance of $0.00 to $2.00 versus consensus of $0.94, and sees Free Cash Flow $0.5 billion – $1 billion.
- Price Action: SWK shares are trading lower by 2.94% at $84 premarket on Thursday.
