SWK's Q3 Earnings Dip Amid Higher Impairments, YTD Net Income Soars

TL;DR

**SWK's Q3 was a dud with big impairment hits, but the year-to-date numbers show a strong turnaround, so hold tight for the long game.**

AI Summary

Stanley Black & Decker, Inc. reported a mixed financial performance for the third quarter and nine months ended September 27, 2025. Net sales saw a slight increase of $4.7 million to $3,756.0 million in Q3 2025 compared to Q3 2024, but a decrease of $199.4 million to $11,445.8 million for the nine months ended September 27, 2025, compared to the same period in 2024. Net earnings from continuing operations decreased significantly in Q3 2025 to $51.4 million from $91.1 million in Q3 2024, a 43.6% drop. However, year-to-date net earnings from continuing operations increased to $243.7 million in 2025 from $91.4 million in 2024, a substantial 166.6% rise. The company incurred higher asset impairment charges of $169.1 million in Q3 2025, up from $46.9 million in Q3 2024, and restructuring charges of $32.1 million, up from $22.1 million. Strategic changes include the renaming of the Industrial segment to "Engineered Fastening" and the divestiture of the Infrastructure business on April 1, 2024, to streamline its portfolio. The company also amended a forward share purchase contract, extending the final settlement date to June 2028.

Why It Matters

Stanley Black & Decker's mixed results present a complex picture for investors. While the year-to-date net earnings from continuing operations show strong growth, the significant Q3 decline and increased asset impairment charges could signal underlying operational challenges or a more aggressive restructuring phase. The strategic divestiture of the Infrastructure business and the renaming of the Industrial segment to Engineered Fastening indicate a clear focus on core competencies, which could improve long-term profitability and competitive positioning against rivals like Makita and DeWalt. Employees might face continued restructuring efforts, while customers could see a more focused product offering. The broader market will watch how these strategic shifts impact SWK's market share and profitability in the competitive tools and fastening industries.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant increase in asset impairment charges to $169.1 million in Q3 2025 from $46.9 million in Q3 2024, indicating potential issues with asset valuation or operational efficiency. Additionally, short-term borrowings surged to $1,355.0 million as of September 27, 2025, from zero at December 28, 2024, increasing financial leverage and interest rate exposure.

Analyst Insight

Investors should closely monitor Stanley Black & Decker's upcoming earnings calls for detailed explanations on the increased asset impairment charges and the strategy behind the surge in short-term borrowings. Consider holding existing positions, but new investments should be approached cautiously until more clarity emerges on the sustainability of the year-to-date earnings growth and the impact of ongoing restructuring efforts.

Financial Highlights

debt To Equity

N/A

revenue

$3,756.0M

operating Margin

N/A

total Assets

$21,753.9M

total Debt

$6,057.8M

net Income

$51.4M

eps

$0.34

gross Margin

N/A

cash Position

$268.3M

revenue Growth

+0.1%

Revenue Breakdown

Key Numbers

• $3,756.0M — Net Sales (Q3 2025) (Slight increase from $3,751.3M in Q3 2024)
• $11,445.8M — Net Sales (YTD 2025) (Decrease from $11,645.2M in YTD 2024)
• $51.4M — Net Earnings from Continuing Operations (Q3 2025) (Decrease from $91.1M in Q3 2024)
• $243.7M — Net Earnings from Continuing Operations (YTD 2025) (Increase from $91.4M in YTD 2024)
• $169.1M — Asset Impairment Charges (Q3 2025) (Increase from $46.9M in Q3 2024)
• $32.1M — Restructuring Charges (Q3 2025) (Increase from $22.1M in Q3 2024)
• $1,355.0M — Short-term borrowings (Sept 27, 2025) (Increased from $0 at Dec 28, 2024)
• 154,884,964 — Shares Outstanding (As of October 28, 2025)

Key Players & Entities

• STANLEY BLACK & DECKER, INC. (company) — Registrant
• New York Stock Exchange (regulator) — Exchange where common stock is registered
• FASB (regulator) — Financial Accounting Standards Board
• SEC (regulator) — Securities and Exchange Commission
• Engineered Fastening (company) — Renamed Industrial segment
• Infrastructure business (company) — Divested business unit
• Makita (company) — Competitor
• DeWalt (company) — Competitor

FAQ

Risk Factors

• Supply Chain Disruptions [high — operational]: The company is subject to risks associated with global supply chains, including potential disruptions due to geopolitical events, natural disasters, or pandemics. These disruptions can impact the availability and cost of raw materials and components, affecting production and delivery schedules.
• Interest Rate Fluctuations [medium — financial]: The company's financial results are sensitive to changes in interest rates, particularly given its significant debt levels. Increased interest expenses, as seen with the rise in short-term borrowings to $1,355.0M, can negatively impact profitability.
• Asset Impairment Charges [high — operational]: Significant asset impairment charges of $169.1M in Q3 2025, up from $46.9M in Q3 2024, indicate potential overvaluation of certain assets or a decline in their expected future economic benefits, impacting reported earnings.
• Restructuring Activities [medium — operational]: The company incurred $32.1M in restructuring charges in Q3 2025, an increase from $22.1M in Q3 2024. These charges reflect ongoing efforts to streamline operations, which can lead to temporary disruptions and costs.
• Competition [high — market]: The markets in which Stanley Black & Decker operates are highly competitive, with numerous domestic and international competitors. Intense competition can lead to pricing pressures and affect market share.
• Environmental Regulations [low — regulatory]: The company's operations are subject to various environmental laws and regulations. Non-compliance or changes in these regulations could result in fines, penalties, or increased operating costs.
• Debt Management [high — financial]: The company's substantial debt obligations, including $1,355.0M in short-term borrowings as of September 27, 2025, require careful management. Failure to service this debt could have severe financial consequences.
• Litigation [low — legal]: The company is involved in various legal proceedings, as is typical for its industry. Adverse outcomes in these litigations could result in significant financial liabilities.

Industry Context

Stanley Black & Decker operates in the highly competitive tools and industrial equipment sectors. The industry is characterized by a mix of large, diversified players and smaller, specialized manufacturers. Trends include a growing demand for cordless power tools, increased adoption of smart and connected technologies, and a focus on sustainability. The company's strategic divestitures aim to sharpen its focus on core growth areas.

Regulatory Implications

The company must comply with a range of regulations, including environmental standards, product safety requirements, and international trade laws. Changes in these regulations, particularly concerning emissions or material sourcing, could impact manufacturing costs and product design. Compliance with financial reporting standards is also critical for maintaining investor confidence.

What Investors Should Do

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Key Dates

• 2024-04-01: Divestiture of Infrastructure business — Streamlines the company's portfolio, potentially improving focus and financial performance in core segments.
• 2025-09-27: End of Q3 2025 — Reporting period for the condensed consolidated financial statements, showing mixed sales trends and significant increases in impairment and restructuring charges.
• 2025-10-28: Shares Outstanding Date — Indicates the total number of shares outstanding as of this date, relevant for per-share calculations and market capitalization.
• 2028-06-01: Extended Forward Share Purchase Contract Settlement Date — Indicates a long-term financial commitment and potential future cash outflow or equity adjustment.

Glossary

Asset Impairment Charges

A reduction in the carrying value of an asset on the balance sheet when its fair value is less than its book value. (Significant increase in Q3 2025 ($169.1M) indicates potential issues with asset valuations or future cash flow expectations.)

Restructuring Charges

Costs associated with significant reorganizations or restructurings of a company's operations, such as layoffs or facility closures. (Increased charges in Q3 2025 ($32.1M) suggest ongoing efforts to optimize operations, which can impact short-term profitability.)

Continuing Operations

Refers to the ongoing business activities of a company, excluding any divested or discontinued operations. (Net earnings from continuing operations show a significant year-to-date increase ($243.7M in 2025 vs. $91.4M in 2024), despite a Q3 decline.)

Discontinued Operations

Represents business activities that have been divested or are planned for divestiture and are reported separately from continuing operations. (The divestiture of the Infrastructure business means its results are no longer included in continuing operations for 2025.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its identifiable net assets. (A significant asset ($8,027.0M) that is subject to impairment testing, which could lead to future charges if its value declines.)

Short-term borrowings

Loans or other debt obligations that are due within one year. (A substantial increase to $1,355.0M in Q3 2025 from $0 at year-end 2024, indicating increased reliance on short-term financing.)

Diluted Earnings Per Share (EPS)

A measure of a company's profit allocated to each outstanding share of common stock, assuming all convertible securities and stock options were exercised. (Diluted EPS from continuing operations was $1.61 year-to-date in 2025, up from $0.60 in 2024, reflecting improved profitability on a per-share basis.)

Provision for credit losses

An expense set aside by a company to cover potential losses from uncollectible accounts receivable. (Decreased significantly in Q3 2025 ($1.3M) compared to Q3 2024 ($7.1M), suggesting improved credit quality of receivables or lower sales on credit.)

Year-Over-Year Comparison

Compared to the prior year's filing, Stanley Black & Decker shows mixed revenue trends, with a slight increase in Q3 2025 net sales ($3,756.0M vs. $3,751.3M) but a decrease year-to-date ($11,445.8M vs. $11,645.2M). Profitability metrics are also varied; Q3 net earnings from continuing operations declined significantly (43.6%), while year-to-date earnings surged by 166.6%. A notable change is the substantial increase in asset impairment charges ($169.1M vs. $46.9M in Q3) and restructuring charges ($32.1M vs. $22.1M in Q3), alongside a significant increase in short-term borrowings to $1,355.0M from zero. New risks related to the ongoing portfolio streamlining and potential impacts of increased debt financing should be considered.

Key Financial Figures

• $2.50 — hange On Which Registered Common Stock $2.50 Par Value per Share SWK New York Stock

Filing Documents

• swk-20250927.htm (10-Q) — 1892KB
• ex311-q32025.htm (EX-31.1) — 9KB
• ex312-q32025.htm (EX-31.2) — 9KB
• ex321-q32025.htm (EX-32.1) — 6KB
• ex322-q32025.htm (EX-32.2) — 6KB
• swk-20250927_g1.jpg (GRAPHIC) — 17KB
• 0000093556-25-000154.txt ( ) — 10631KB
• swk-20250927.xsd (EX-101.SCH) — 59KB
• swk-20250927_cal.xml (EX-101.CAL) — 73KB
• swk-20250927_def.xml (EX-101.DEF) — 315KB
• swk-20250927_lab.xml (EX-101.LAB) — 716KB
• swk-20250927_pre.xml (EX-101.PRE) — 537KB
• swk-20250927_htm.xml (XML) — 2084KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION 3

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 47

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 47

— OTHER INFORMATION

PART II — OTHER INFORMATION 50

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS 50

RISK FACTORS

ITEM 1A. RISK FACTORS 50

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 52

OTHER INFORMATION

ITEM 5. OTHER INFORMATION 52

EXHIBITS

ITEM 6. EXHIBITS 54 SIGNATURE 55 Table of Contents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME THREE AND NINE MONTHS ENDED SEPTEMBER 27, 2025 AND SEPTEMBER 28, 2024 (Unaudited, Millions of Dollars, Except Per Share Amounts) Third Quarter Year-to-Date 2025 2024 2025 2024 Net Sales $ 3,756.0 $ 3,751.3 $ 11,445.8 $ 11,645.2 Costs and Expenses Cost of sales $ 2,576.9 $ 2,630.7 $ 8,079.4 $ 8,274.9 Selling, general and administrative 789.7 790.0 2,512.6 2,467.8 Provision for credit losses 1.3 7.1 18.5 9.7 Other, net 72.2 86.4 187.4 392.9 Loss on sale of business — — 0.3 — Asset impairment charges 169.1 46.9 169.1 72.4 Restructuring charges 32.1 22.1 52.1 66.9 Interest income ( 50.0 ) ( 52.8 ) ( 148.1 ) ( 139.3 ) Interest expense 129.1 131.4 384.6 384.2 $ 3,720.4 $ 3,661.8 $ 11,255.9 $ 11,529.5 Earnings from continuing operations before income taxes 35.6 89.5 189.9 115.7 Income taxes on continuing operations ( 15.8 ) ( 1.6 ) ( 53.8 ) 24.3 Net earnings from continuing operations $ 51.4 $ 91.1 $ 243.7 $ 91.4 Gain on Security sale before income taxes — — — 10.4 Income taxes on discontinued operations — — — 2.4 Net earnings from discontinued operations $ — $ — $ — $ 8.0 Net Earnings $ 51.4 $ 91.1 $ 243.7 $ 99.4 Total Comprehensive Income $ 21.5 $ 228.2 $ 556.3 $ 73.1 Basic earnings per share of common stock: Continuing operations $ 0.34 $ 0.61 $ 1.61 $ 0.61 Discontinued operations $ — $ — $ — $ 0.05 Total basic earnings per share of common stock $ 0.34 $ 0.61 $ 1.61 $ 0.66 Diluted earnings per share of common stock: Continuing operations $ 0.34 $ 0.60 $ 1.61 $ 0.60 Discontinued operations $ — $ — $ — $ 0.05 Total diluted earnings per share of common stock $ 0.34 $ 0.60 $ 1.61 $ 0.66 See Notes to Unaudited Condensed Consolidated Financial Statements. 3 Table of Contents STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 27, 20