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Stanley Black & Decker stock rises on Q4 earnings beat

Yahoo Finance Live anchors discuss fourth-quarter earnings for Stanley Black & Decker.

Video transcript


BRIAN SOZZI: All right, for me, I'm tracking Stanley Black & Decker here from the home office, guys. A couple of things stood out to me here. Of course, the company beat on earnings, stock getting a little bit of pop here. But I want to call out two things.

First, is them teasing a new $1 billion cost-cutting program. I used to cover Stanley Black & Decker as an analyst. And the one thing that always amazed me with this company is how efficient they are. And seemingly on the drop of a dime, they can come out with these major cost-cutting initiatives to boost margins. They just seemingly do this every single quarter. And oh, yeah, they actually execute and over time do improve their margins. So that was something worth calling out here.

Now, on the negative side, they are noting that, overall, organic sales dropped 5% in their tools and outdoor segment. They're citing weakness in consumer-- lower consumer demand in the do-it-yourself-- do-it-yourself market.

Now, that dovetails, guys, what we heard about a week ago from Sherwin-Williams. Not a great quarter from them. Not a great outlook. Immediately I'm thinking Home Depot, a Lowe's are sitting on disappointing quarters. Both those quarters just ended earlier this week for those two companies. And then maybe even the likes of a Traeger, another company that sells into the home centers. Maybe not a good quarter from them overall.

You know, we've been talking about the impact of rates all morning long. When you look at Stanley Black & Decker, I think that says a lot. Continue pressure, continue downturn the housing market. Of course, that gained steam late last year, impacting a company like this that sales tools that you need to build a home or repair what you got.

BRAD SMITH: Yeah, it seems like they were still passing through some price increases during that quarter, as well. They noted that within the segment for tools and outdoor, as you were running through a moment ago. And regionally, Europe, that was down 3% during the quarter. North America down 7% during the quarter, as well.

So really kind of going back to that consumer mindset that you were mentioning a moment ago, Sozz, and where some of the DIY projects-- I mean, if you've got tools, perhaps you don't need more tools to just continue to layer on.

BRIAN SOZZI: You always need more tools.


BRIAN SOZZI: Maybe not now.

JULIE HYMAN: I mean, bottom line, guys, it's surprising to see these shares up. They were trading lower in premarket trading. The forecast is pretty terrible, right? And yet the shares are trading higher. And I think this goes back to what we just heard from Tony Dwyer, that companies that are cutting costs are being rewarded even if the numbers don't look that great right now.

I mean, you know, that's reflected, I think, in Meta to some extent, too. We're seeing a lot of examples of that. And Stanley Black & Decker is just one of them.

BRAD SMITH: Yeah, if there's any continuation in that industrial kind of decline that they saw, net sales down 1%, then that could certainly impact the margins even more so from here, as well.