SWK - Earnings call transcript Q1 2021 | Stanley Black & Decker, Inc.

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Operator

Welcome to the First Quarter 2021 Stanley Black & Decker Earnings Conference Call. My name is Shannon and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. the Dennis to Lange. turn of Vice now Relations, Investor will call the over President I Mr. Lange, may you begin.

Dennis Lange

XXXX call. Thank you, for Decker's us thanks for quarter Shannon. Good morning, Stanley everyone, Black and joining first conference &

CEO; On the to Finance Vice President addition call and Mcchesney CFO CFO Lee of & Don Storage. Jim and myself and President Allan, is in Loree, Corporate of Tools

our turn to direct our the filed now from our cautionary we with are prove normally results on differ We events in as Act some release are make supplemental are available issued call presentation which release. and in materially Don beginning as the of will be statements Our the during was you earlier results during sticking The this press Jim morning, today. the we of and and are may by actual replay access and to possible various per earnings statements number other press Loree. to XX over call assumptions our most XX one such, matters on to uncertainty. at filing. be of to call we not be And which will in we the section we risk Q&A with and our that the other a any code accurate, on forward-looking views. calls, will that the first just involve IR CEO, Such available that with forward-looking XXXX A may based question our session. future followed going our current refer Consistent quarter will This release morning statements AM review statements replay therefore also that a do, the website. be making based morning's call Jim, today. and recent Lee and caller. X-K It's this I'll we might

Jim Loree

for Dennis exciting help the year. results Decker. have outstanding execution, I the here and excellent powerful strong by our revenue accomplishments. say backed this to employees results an opportunity Black with our good impact doing Thanks, have were we who highlighted these maintaining safety to mitigate start & pandemic of our to customers And extraordinarily XX,XXX markets and era record focus an and and by Today, the thank which supports us it’s our on the year. communities other priorities The for us many you past Stanley around day continuous EPS and These to priorities. employee improved operations part the to by have delivered morning and XXXX virus health everyone. outlook at our serving our report well of operational globe served

versus $X.X First deliver all-time of were quarter organic billion each up record revenues segments contributed to to our prior year, growth. an XX% and XX% regions

an hot with Our the Tools growth markets business business contributed blazing across XX% performance, the growth its growth, yes, confluence to extraordinary regions on globe, & a units and XX% trajectory, in Vibrant factors. quarter. continued strong organic by the led with All Storage ubiquitous of a business a including enabled and chain in concert electrification ecommerce, execution the markets positive and strategy and with home reconnection consumers garden, trends, channel with outdoor and growth. supply focus secular our on intense

now level was many industry deliver. seen and well. attachment oil Craftsman share was powerful security, by with proven industrial in combination as and organic along This And The at such digit Stanley, and automotive, gas. continued aerospace growth X% data innovation performance make business with is technology expectations progress this double quarter in tools can installation we've and strong safety portfolio market restrictions gains line is on-going and digital with for growth transformation selling health with and offerings, leading the POS and placed consistently security to general the Industrial X% as partially gains. and in of market iconic service an and level continual first recovery example what a to product was enabled our tool in the outstanding organic combination declines of the and as techs. muted DeWalt, on our markets We Our accelerating. at given our brands a share has deliver provider

well. strong XXXX. were market some us are has the about the support All-in, impressive April rate quarter up in news and basis all contributing. But opportunities higher million than our resiliency which XXX% period rate $X.XX, flow. price performance visibility all-time quarter our $X.X quarter revenue control, the margin the quarter margin given full great each to And in as great a an the through growth start in flow was same prior the year. the cash operating well. these The more a year company the extent record This and leverage, generated the XX.X%, in XXXX, flow about cash excited prior to cash volume to potential regarding Adjusted free for that into recovery XXX year. a We throughout sustained cost back $XXX at and of and half and first up record year. both another points from operating for free over was billion And EPS was productivity, second the as

January point during of into momentum earnings As initial for XXXX going call. and our has XXXX I since a significantly improved observations result, our view our outlined

tools see, can you as remains roll. on a First,

full the emerging and stronger are to industrial far Europe many back are force, are the commercial imaginable Pro and downs previously markets in is blazing. still in lock mentioned, and given as hot down is well. already the In the markets than bogged all positives countries addition

numerous efforts secular availability parts by to With like among of We extraordinary supply amidst also retail are many been the manage challenges, our of from We're people that their basically accelerated including and that our from of and others. two trends In have partners current would clearly benefiting the pandemic. and up factories have said, amplified serving effectively chain to the regard, in inventories a additional will levels Texas new in Worth, in production growth. an recently Mexico point replenish matter one their in running production begun we be weeks. as sale are Fort our benefiting this of

we across this and continues rebuild is to and to secular occur channel view approximate the current shift to global The be half Our massive Home with surge driver global DIY a The markets. key year. week consumers e-commerce the driven that Garden will the four this enable in of the back by inventory our reconnection up demand achieved to million The we launched number channel electrification nearly and the during reach market accelerating products this growth outdoor year. continues growing new of in just and XXXX significant this XXX% listings. as million $XXX the is of last increased versus business in approximately We expect a have quarter. $XXX now product

are year multi that this and acquire very already to in at We with option our of year. the July window eight multiple a opens XX% relationship from benefiting with attractive remaining our times to a MTD EBITDA seven

world to leading market our serve regard, stakeholders. leading category, and class from to brands, and shareholders comes that attract Our point. array leading iconic talent like customers, other I world's an innovation, Company a a as the underscore and immense In breadth Tool would building diverse success position can this passion of depth, a key in and

operating share are expansion point, gross this again making gaining at future. levels. and said. significant widen the as to to delivered options lead are And strong profitability, At margin as making temporary We once and and investments margin it been investments our in continuing bold relates perform are cost have to restored. all And significant we I we historically

inflation few are actions taking into margins our XXXX, those we and our in increased review outlook aggressive and to moments. XXXX a incorporated have protect Lee will in We

finally, program will across portfolio. tech enable market continue potential this spend the markets our rebounds Additionally, and support remain industrial further for the infrastructure We And gains increased our will continued. resiliency and that could enabled and the and across margin general attachment security global automotive, optimistic rates. margin

in the have by catalysts, markets for high our summary, growth, prospects So in positive the our businesses. outlined we benefiting and across conviction recoveries trends I our supported cyclical

we ahead XX% updated us of lot will $XX.XX XX% excited XX% increase a now represents for a of cover the turn to first The XXXX update lies EPS security's significant This terms per year quarter to Allan from previous Don growth result, see, our creation. over the in there's can year. in And And as opportunities and to now our value about what adjusted prior for raising to a share. I our it guidance. at significant guidance. total a range you be a reflects $XX As $XX.XX organic of versus a guidance to revised of with to are midpoint company

Don Allan

to quarter. everyone. segment & currency to that growth report resulting up I organic you, in the XXXX. on the start revenue good and each And exceptional Jim. pleased XX% XX% price three Thank to XX% Storage an morning business contributing volume growth delivered points, with results additional and our am Tools contributed for first

and the strong and the of result and via focus as performance. segment expansion. air to this was gains in team's rate versus In up margin These such costs partially productivity and all our innovation, This up the from the of future. consumers XX.X% driven control U.S. supply elevated the operating incredibly the incredibly as and addition, was share positive channel strong freight a in the America, for the On underlying The product professional operational performance delivered is XXX DIY electrification, the investments garden. Volume, demand, growth as as emerging on markets. organic This well shifts new XX% strong excellence North e-commerce, consumer to remained users. by were drivers serve to higher relentless market and the organic margin drivers year. were had growth demand Europe, across prior main cost basis offset retail and continued in points secular expediting chains price, support XX% basis, leading momentum trends professional related we home from industry the share outdoor reconnection strong geographic growth, by with product and gains and XX% XX% on-going demand, regions, with

is in growth resounding digit XX% we decline focus MRO quarter. customer inventories trends for more our back capture channel experienced play American versus first mid-XXs quarter customers end with to trends are high strong reinforces line tool Also, QX continuing quarter. is conviction the space. last anticipated digit growth of with XXXX growth commercial QX The our occur industrial to relatively and additional construction store demand That in the in Retailer base times posting back rebounded XXs close behind of mid-teens as now to our and clearly accelerating increase were further in double the exceptionally the signal to to this the levels, five the to in and decline well accelerating remained low e quarter, these are industrial half opportunity. as making sequential in range. American the growth remain the XXXX. commerce North recent experience quarter our so forecasted in North than channels Pure with nearly expected positive inventories consistent high the the which activity, we of within compared fourth positive investments two is Additionally, pro Point-of-Sale approximately the with doubled manufacturing four and in this that omni etailer this in channels QX the the year. single weeks platforms up

was to than generated as channel and Nordics, business -- France, acceleration tools by over the more Now Iberia XX%. all of retail up across the strength. the Central by e-commerce share the shifting Europe, U.K. regions retail XX% Italy gains all led the well rapid impressive were a organic in performance growth champ relies as This Europe, European while

with emerging by in demand in growth momentum construction XX% to accelerate an e-commerce. related XX% the to and XX% countries all organically, with addition in in Finally, impressive strong outstanding led was markets traction up Latin America Brazil. over continued up

China XX% organic at growth doubling in least delivered India with both Asia size. and

XX%, but of Russia quarter. Indonesia crazy, excess and XX% strong in for grew the Japan, growth Those each respectively. delivering XX% Thailand and all and absolutely remained double-digit growth Vietnam strong, while and Malaysia, wonderful. they're Korea, Turkey numbers South posted are

delivered as revenue turn Storage result the after combined and execution positive launches. let's trends, continued of and from organic Tools geographic commercial, our attention momentum the XX% Power reviewing supply new fantastic to which So with growth, product Tools well & construction as home was the performance. SPUs chain sharp

world Flexvolt, the all the of built the over are These with are our Flexvolt way, highlight brand and last launching New DeWalt, these products positioned leading strength innovations upon and of professional positive Xtreme, largest XX% delivering well core in measured brand in within such the industry, fastest SPU users. in as the led years. for revenue. Craftsman, building Power We Detect, as five our further innovation, tool industry professional positions Flexvolt total quarter. To average the growing demand, Advantage ahead products the Atomic, growth pro grew the by

DeWalt are under performance wins This the it a particularly outdoor the growth remaining was season the as line it we XXX%. record breaking top with in MTD Decker brands. providing the quarter last Craftsman importance ahead, and of products to to pleased XX% Black and driven more I and for business, incremental with covered am of quarter, of report growth innovations moving we excess leveraging purchase listening This start catalysts organic & our cordless option to is the by our increases opening mid-year. and disclosure

major All the a our growth. season on participated explosive It’s growth see opportunity. margin retailers cell major ESG positive. products exciting this reads and and very market new of our early in This is two to are at

equipment electrification conversion years. the growth the As bring for our cordless to excited more about could several outdoor not to this industry over be company our We and the creates market. we shape and the it next potential capabilities

accessories rebounds, storage market and the Finally, XX% hand tools, fueled product organically introductions and grew as new growth.

in innovate industrial construction to markets. continue key We and auto our

and and the and new measures as tape metal momentum, variety We growth accessories. as and a DeWalt well DeWalt are robots product of seeing new solutions, storage including plastic Craftsman

this breaking reinforce has position One, over So summary, are team Storage is users there harnessing I to what by business. keeping a excellence, end of and breadth, we for a category our leverage powerful related three, growth Tools largest the trends business is And in the it our built are and team. was this center superb. done, to job and team The time supported history is performance our few Two, by excited to of fueled, rate global are agility on not sales, delivered in an industry and our of want continue relates quarters. to & innovation, unique we continuing you Well a The and is profits phenomenon. focus the customers to operational execution enabled position. points it the geography. the Thank first to about am done. well as dedication, and passion we this The one quarter in entire brands, leading at I for future the possibility tools record do. that people. the margin

gas productivity XX.X%, investments. Industrial, as X% from only partially an and cost XX% volume, and includes growth to growth by prior total from offset growth improve growth, benefits sequentially margin reached divestiture. versus the acquisition. XXX were from revenue X% basis oil points Segment new partially X% point year offset positive by quarter. CAM This one which with to segment operating increase in currency, the The this delivered the an line X% of reductions volume and product Moving continued was organic

their the we quarter Looking as organically, segment, up within see points. outpacing further was end up somewhat fasteners automotive basis to through we disruptions global and held to engineered were XXX the Automotive production X% supply move light approximately OEM continue and vehicle back revenues by fastening This due industrial navigated were improving markets. as XX%, shortages.

up significantly growth had demand from spending global four revenue activity, challenges, modest field independent tools a point as the to a This of productivity by Combined decline X% France turned new price X% their currency, third double impact in Our last acquisitions impact was embraced This inventory quarter, the flat our business from was XX% a however, improving XX% experience security. and manufacturing up in slowly Total year. continued security. quarter Security. momentum related growth organic more as very believe XX% health and OEM. dealers. this we industrial gas. and activity. pipeline a of four Overall, revenues was growth on to divestitures and technology in automotive were delivering a OEMs Nordics. transformation was sign and possible by as down was as from and reopen growth decline France, partially increase increases. the automatic in positive with a by the more were this low supported growth organization with and X% up from Solutions Infrastructure North particular America customer automotive the European in that site offset which within in growth lower that international Driven in and completed construction Shifting within we digit it's point access. the customers with Growth and has organic commercial offerings healthcare a in offset X% experiencing fasteners than to contributed point. organically resulted and business safety Product transfer positive Data across each within electronic reduced driven The attachment was offset is oil XXXX. in system And allow ignited the entirety industrial good XX% by capital doors is commercial electronic continues installations

in organic strong points to activity charges were remainder profit due combined record us the the XXXX. prior for X.X%, trends quarter. the Our security that build The XXX new growth momentum, to segment up confidence these again The growth security despite pandemic. markets basis versus the lockdowns rate, that and solutions year. backlog once of deliver in new underlying gives solutions demand to highs health resilient code two secular set contributing Overall for And these at build. positive points and to of up excluding incremental continued executable safety continues approximately is in proved with the bidding

offset of from related Many to would investor now over who and investments As for you turn plan it like game to from the the price year, was Corporate he flow through is quarter. cash will conferences for and other to the partially Finance now and safety of over Mcchesney you health know Storage. last CFO our growth technology cost Lee VP and SaaS Lee? I and our control apps. impact to the inflation. Tools walk And by tackle touchless door solutions, & our Lee

Lee Mcchesney

Don and good everyone. morning, Thank you,

seven, flow review free million and our performance year performance. $XXX will now operational earnings slide to flow I prior growth. cash Moving versus Free a cash improved behind strong

period improve please normal historically capital prior in the are strong positions with first keep higher start year amplified Now the the by was is compared cash mind a slower balances serve business. as to year the the working outflow which as for quarter strong Working that free capital demand customers. seasonality, work as line you in us our and for to demand in also somewhat well inventory to than as the

capital will point we inclusive CapEx remain the higher X.X year. with of do further improvement confident working that hit turns one cash We investments balances, prior despite turn for versus flow support generation Now, year a growth. to a the strong

a the drive now strong capital will to company you continue efficiency combination on We performance. inflation. to earnings commodity working give update like I’d quick across a with in

about finished to supply represent chain responds our rapid of This and of by market commodities, of this in the as we dynamic as many have two our we goods a across supply demand will surge the and generally been reminder, therefore, its a quarters agreements steel incremental they the the Currency we one supply majority well and key pricing headwinds incremental benefits is million, drivers inflation to previous global exposures, will guidance. occurred half which and and pressure resin of in many $XX initiating way of electrical such through additional headwinds, lock a you of productivity the significant impact cost impacted $XX can spot this our into that the these resins, year-over-year And second As actions, commodity of largest the outlook are work to opponents that temporary the offset however, approximate copper, as in follow, assumption headwinds this and has and headwinds partially The year. and XXX gaps. materials advance. our of And million purchase XXXX I've $XXX now offset million offset actions versus XXXX. of to a a third batteries components. half positive to remains believe carryover steel, response, We inflation included realized inventory pressure. be at In We aluminum, are in has expect some $XXX which provide to million. purchase. up as million two the increases

continue us guidance any balance additional Additionally, margin the materialize of approximately of as margin will outcome have This incremental contingency included or a is which we the better year, available offset our to act to in not for million today. may $XXX resiliency help an support the that full year. over headwinds

the SPD We agile turn our will are in strong inflation established in and to are updated Don, in our to through walk that, With continue to guidance. who implied deliver over I'll year our levels the for full to it leveraging you we've model XXXX. XXXX guidance back remaining and operating margin response

Don Allan

Lee. Thanks

assumptions slide nine, year. full growth organic outline both to now the and I Turning second for will quarter the

all approximate with the channels. We regions In company. growth XQ the quarter to XX% to grow expect Storage Tools and continued to revenue business strength expect & second across for XX% we organic XX%

the growth supply for moderated markets industry. levels industrial in We with OEM to show the the the are tools. and comps. and But constraints haven't cooperated continued mid-to-high easier planning to attachment versus QX will and on in Automotive grow momentum industrial demand acknowledging teens we fasteners continue

expected other the areas oil and segment. partially growth remain offsetting were depressed and gas aerospace stronger and of the to Finally, expectations

from to organic levels second double the on & Turning plan full total year are for the customer Tools digit increased to upward to we XX% revisions to first to the Shifting improve in quarter. sequentially, low execute will expect We benefit revenue range raising XX% Storage growth sites access record growth in Security, Industrial. we from quarter. to company with and the backlog as the we to

growing Tools confidence Our & continues market to of Storage demand strengthen. in

are to the improved. prior first the versus the X% our XX% of growth expectations for to second & and Storage Tools full assumptions estimate XX% half Both raising We organic to X% year.

The based first assumption QX visibility QX is performance. the stronger combined on half to with demand outstanding

benefit between half assumption This a your the increases are recovery of historical XX% the channel back X% improvement, decline levels. assumption and X% versus tough growth occurring. as assuming in second the The to strong to inventory in XX% to a comps. includes from we reasonable given to Despite the back acknowledging market half the XXXX growth represents

scenarios are chain better industrial preparing and demand given which prove trends. improved well it XXXX have we very to visibility which to be very to conservative, the we However, ready should The we X% be to for attachment X% planning assumption stronger could is current supply our global as market and for demand recoveries. be will outlook industrial to

automotive supply view expected the into become constraints for opportunity XXXX be And Right oil and continue headwind. gas year. in will remain our now built have depressed a an significant that these finally, customer chain aerospace then to is markets upside We but and will next our view.

product The and offerings, solutions. for encouraging full are and we security electronic safety coupled the health and to backlog growth commercial is X% record maintaining year. X% technology with Lastly, based and organic our at our data security and assumption

remainder accelerate We throughout the are growth the the year. that of optimistic can

on guidance the slide summarize XX. I'll assumptions remaining Now

charges to guide We be earnings and start most are beyond to we expect our related $XX.XX are the and pricing right the Walking moves range EPS and the range, year slide. XX% of costs prior the versus transformation versus reflect is the side $X.XX to EPS growth EPS margin commodity a of $XX.XX an adjusted from $XX share along demand from At headwinds hand partially is on On $X.XX. $X.XX January outlined investments, The a year. $XX.XX increase improve EPS offset the growth initiatives. one our integration net GAAP facility from and and approximately raising incremental to $XX.XX guidance, range. the of we to narrowing the actions improved a contribute year adjusted other basis, drivers basis, the $XX an of by the across the to this of outlook per for businesses. prior adjusted $X.XX. are inclusive On midpoint This functional incremental midpoint up with outlook approximately to and of time volume exceptional XXXX various a to increasing inflation resiliency, outlook

the our $X.XX benefit bringing are addition, preferred variability of EPS current to that the covered primary Series remains elimination a to to at adds In the we C beyond I the Stock Preferred $XX.XX. and Demand us of dividend XXXX planning EPS. the call adjusted adjusted driver midpoint earlier

the charges below We current modeling. have our also disclosed with items other and to significant the for our our for M&A year expectation and full pretax -- the line current full your year assist assumptions

full cash approximately lastly, the to second be share to Additionally, we per the free XX% expect adjusted quarters net approximate is earnings performance. year reiterating flow And GAAP company income. of

expansion EPS XX% A growth, XX% for healthy very view XXXX. summary, adjusted So XX% we approximately the the expansion organic EPS yet recognizing in the company to dynamic operating environment. for balanced a expect XX% in to and year,

allocation As the demand accordingly are capital contingency well due our $XXX to and not new staying our have opportunity an on earlier, react excellent and ratios. if resiliency Lee flexibility this of later view stock view, I guidance of we Therefore, the included market and short as a cash our stock price expected drive next. in early positioned of mentioned leverage and, point current position the very to said have performance earlier margin for we million year withstand MTD are preferred this or or term with we presents From our preparing in mentioned a volatility. while trend beyond can timing for better guidance potential as track retire higher

term, communities. We shareholder to top are with while back maintaining remarks. all and to the the free with the call now cash deliver Jim leverage, turn generation of that, I a confident assist company market flow our safety long of continuing organic the have growth that strong returns quartile above to will and positioned operating we in to our prepared employees conclude over our With summary over

Jim Loree

much strong trends, a catalysts. the momentum strong excited improved so growth positive as potential of over delivered and about pleased array record and we've last given and heard strong seen a had we am have the to And have the with team's growth XX secular built organic year the continued our vibrant I they enormous and markets reflecting Thanks start Don. we very you as efforts months. outlook

As we these and which our health portfolio consumer the of benefit trends, and been look electrification the Garden, and to to positioned pandemic, by reconnection accelerated uniquely safety. the ecommerce, with is future, amplified Home have and several from

are gains. opportunity capacity We growth to innovation, continued commercial and investments and share on by organic support funding capitalizing this

in to accretion. has July EPS exciting Additionally, in to cash MTD add billion our the option and create significant acquire remaining the up and flow stake growth and revenue XXXX potential to of in $X runway for an multiyear

is never known the for elevating performance, differentiated positive ESG becoming as world's corporate and responsibility most one to stronger. And commitment our been of that from passion so positions since of companies has Our innovative period support in level C Lee. the company during XX this with TSR during in the years and entire wake I've X,XXX% that or held delivery Don social

of our more us a we opportunity planet on be margin if an growth growth XX. compelling close communicate array We in strong well XXXXs to the for you are expansion, people, our you'll great as details event prosperity This have for to our personal level, story higher and see as to and winning for attend even clear and May summit taking commitment pursuing yet opportunities which a will on governance. up vision the virtual

leading number We will be the showcasing executives initiatives. of these a

Dennis, attending. you're forward there. So if to you out please to a Dennis? we now for reach look in Q&Q. ready interested seeing And we're And

Dennis Lange

you. Thanks, can Q&A, please. now we call open Great. Jim. to Shannon, the Thank

Operator

[Operator Instructions] Thank you.

with comes question first Research. from Coe Our Wolfe Nigel

is line Your open.

Nigel Coe

Thanks, Good morning. guys.

Jim Loree

Nigel, good morning.

Nigel Coe

ringfenced I'll inflation. maybe I unpack pricings. talk big, think just A that. here. and that and industrial the price In planning up how a this lot particular, balance on about for well prices the neutral you of it’s the in actions get the spot step you're to point. Obviously I Are current But seeing XXX the cover had know to big is XXX year, at try rolling ball hold,

wondering, I'm Thanks. what's price trying recover in industrial? to the So just what's, strategy

Jim Loree

goes probably And start where little some the in to. to say said, July, of environment in appears what from trends the a January. this on if I'll the in very stabilizing. to half inflation I been impact a I positive but we is will color said million that. Lee up depends year, XXX really sure. we mean, were add last be right get then few it I about $XXX continues Yes, Yes, the the volatile at would a and being the demand it's now. two And closer current back with for inflation, increase. in we this year. believe to as material or That it progresses difficult in commodities back of year do a these year, have to impact there's three the weeks

three not starting to this volatile modulate sense So maybe have to will make weeks of that it's is the manage. at one it that the something a two more encouraging we'll is a things little that trend. least But bit. in But or does be

the a well. strong market into the is we next of be likely remainder most as year, that do will I believe news Now, managing good the demand very year to for

And so a associated with that inflation. clearly is benefit

across Storage demand underway & in they aggressively focused focused impact on do approach the a is that pricing where are industrial. which there's surgical a very will Tools obviously way. areas significant Tools pricing does We what have not think we major & two which and do, impact, businesses is on actions typically Storage

that in XX got industrial the been under price feel and focused have I will we well days. place, particular is through as we we customers those manage our that we'll feel team next like dynamic with area days in likely processes We the in some And control pretty an a better that more And on we success taken actions do. always good think about. like rate. last already we we've so feel that Industrial very actually is has And in XX But have we've that. good businesses. we take the will

get that business. right area going we're the pricing all making think we of So in impact I be sure watching the to is and interest tools storage and the

stage, think as add we be at in think completely. needed. said will Now looking months by, manage three at that this as if now, we year offset you productivity. We in normally the we're we going as find to do want navigate that Lee? We're regard. to areas more to is dynamic, to it And and we to we Lee that next XX% optimistic this I a term. of look is contingency do, way progress the through able offset said, this make to more being at our but Anything which to short other margin that Right to the resilience go X/X like go we're we're headwind help

Lee Mcchesney

on volatile. Yes, promoting I it. you off it's it's on businesses. are side, But said in we the are think we going action Well, all three

in have But where And everyone, announced. all in all then have million, contingency, really not I resiliency parties. Some $XXX with our have our still guidance. we with, we're that's margin been we conversations remind

if we good think some we've have place. up, was I coverage to a pretty inflation And, creep built So there.

Operator

Thank you.

with comes from Jeff Research. question Our next Sprague Vertical

open. is line Your

Jeff Sprague

Thank you. Good morning.

Jim Loree

Jeff, Hey morning. good

Jeff Sprague

up, those structure to play vantage new but finally under cost to you initially, question, you opportunity shift what a Worth an from Good to It bit of morning. like volume, needed get cost and see Congrats, opportunity, the from presenting shift an and maybe for know, out sounds kind geographically do hey, might geographically viewed into to on curious right, kind Mexico little just extent just standing think, as to but I Fort this be that were the of sourcing. point. [Indiscernible]. change and they simply the And, need plants,

Jim Loree

waiting just eventually. these when has do minor major limited. in fortunately, places. up or depending change the opportunity you waiting, the from shifts it, XX%, because having look shifts, although get trying there the reality you're the demand, is, get to the additional you to how is the essentially, in that's production volume in, year-over-year, serve, on in production We'll the But at you're on say, any precluded shift, I volume but would spot unfortunately,

up the people set point, And historical that the more serve would we'll it, continue we terms programs, will be and the in a the once demand window And and in the we call in need shape demand just so to it of, undoubtedly I great have to plans returns happen. opportunity to some trend at we to well, what then all levels, of have. have meantime, make that do we the

Lee Mcchesney

Yes, that. Mexico we thing these just plants new bring in in the base to One are I'll add one doing Mexico, building out with supply are we it. we up thing is, as

get established Jim's as ship, the to production well And whenever more an at where we into so, existing supply from stage we do point, our to will the can connected example, well base to stage. Mexico facilities and be that China

Operator

Thank you.

comes next Barclays. question Our with from Julian Mitchell

Your is line open.

Julian Mitchell

outlook. Hi, just just wanted to back. morning, back good morning. circle circle margin wanted Good I the to to

at half. maybe sort writing lower said a the wide QX the second guidance and sort better am at you've that bit what for maybe of firm for thinking looking of a margin second XX%, half in of little you're the margin, sort year, Looking the I the

that, points second mat, understand sure that could you XXX wasn't is much million couple the the I help way wanted half, a and on in that please? headwinds, of off of XXX of also maybe us down make commodity So of year-on-year, how sort to if just allied to

Jim Loree

headwinds commodity to in million the second half. is close the Yes, $XXX

So hitting a $XXX in is that the us portion second large half.

into depending question, XX%, half, be is bit and, XX% headwind that do around So the higher QX operating the between XX.X%, and really for somewhere along than somewhere where your be XX%, really maybe back goes of little company and think a your good margin the the I how lead -- success first I which, in on the will which lines part demand offsetting our then and described. it'll a

is is this the the commodity year-over-year. that's drivers clearly headwind focused When a And you be margin a operating in tools look large at part large where year, the our full of will that at so big business, that part rate because for our of of modestly stage. up

maybe so And XX%. be the than a little XX% quarter, better XX.X% it'll to in the for back half, second be bit around XX% around tool should XX%, And margins.

applicable and at an below to out look we annual there that's performance was just that XX% about want to everybody range we our so single XX% a and remind range well. every just slightly that for term and quarter, necessarily say that more we And as performance long wasn't laid it we

operating over somewhere we XX.X%. margin year, between the to a And the tools for be, last XX%. so and increase be expect rate And of XX.X% rate would year's would significant margin which

Operator

Thank you.

with comes question next Baird. Our Tim from Wojs

is line open. Your

Tim Wojs

Yes. year. Hey, Hey, everybody. Nice. start the Nice good work, to

Jim Loree

Thanks, Tim.

Tim Wojs

you Maybe keeping if the at just the actions supply demand? just sure of taking that little could you're supply a question are chain? maybe really with up to least talk my bit the sell pressure on I my on just acute guess some about you're most make And through bigger where seeing side? you sell,

Jim Loree

Yes.

per the resin straightforward, have batteries, semiconductors. shortages, fairly it's in it's mean, don't sense that We se. I So

issue. that second That's half facing the pretty shortages. have I much we second know if problem are if the guidance. some So, resin Batteries, some solved not accelerates the the half, beyond our manufacturers growth think I

First we're up upside capacity to level. all, second would to at we're if in And batteries, of the be trip no successful guidance And specifically ever the we a free I were constrained, that good only Asia, And issue. for talking regard. about battery half. made

regard working well. start relates shortages. running we upside what's in issue down think to more have comes revenue So we how ability can of that in on before make on well. millions achieve as some And we to that that issue as as hundreds batteries And dollars we're into of headway we are as it many of versus no semiconductors and the guidance and just it to

Operator

you. Thank

Our Rob next Wertheimer from question comes Research. Melius with

open. line Your is

Rob Wertheimer

to lot remarkable. willing everybody. it's color to gain know the kind that side, wonder, a sent the share shift to new work this on the I Hey, It's, of with I you've cost additional is seen, guess of accelerates markets. execution. some time, you're I give wanted from revenue good globally And of touched including side whatever and I on the where that the you penetration whether stop. as online to that, morning, you players continuing the global winning who are us it of Or, hard just you to gain know, against well, for ever have in Thanks. And more shift. winning two maybe in against who is up? players when are or share year online markets time maybe really other behind even I'll Europe, you a those might you? three or maybe catching or a don't EM, smaller channel

Jim Loree

born & we to And with Yes, Stanley. that when at we that around up United after major the globe. or And was just close revenue. XX did developing only smidge. about merger. States, but channel with merger we after were And it in ago, I in billion systematically think did year, year-after-year was the we worked zero, e-commerce or time, zero, or our last Black Decker so a acquisition the e-commerce years almost strategy did $X.X the year, not do the of e-commerce And the it hard we player

we business so BXC business three third, and channel in of resting third, was quarter truly this teams market globally significant channel, the laurels, occurred fourth percent a the of that in advantage that fourth have investments enjoying XX% shift, a much relationships go where about Instead under with XXXX. have we to of of into and now, channel that year almost big accelerating first as BXB, year. BXB, relative we the because working resting just and share when year, we're the now BXC from have taken big laurels, in on really the of advantage, that quarter, e-commerce remarkable. X.X to And globe starting last beginning went to as strong are plus this billion third, share in one globally. project. markets To has XX%. Tools indexed. then we people that of the around on players, last instead prospects you And And we And a revenue extent pretty for well look on deep this our flourishing Xx with in growth and incredibly that quarter, everywhere

because we lot penetrate, existing doing share positions that example, India, And Germany. of So given today. players out the and DXC so there we'll are be in a China, And take, those to are channels in that for capability. difficult regard are investing the

where share would see and the are tools, And we'll gains the to see, where players in local that think minor players. e-commerce that's I from how the and major So other I tools, say then over industry that hand and now, to we floor long time, mover in are make expect advantage, for and big first we we grow the the sustain as pressing investments to, sure that I a would maybe we'll them accelerator right have but to as the possible. the coming power is advantage continue, going tools,

Operator

you. Thank

Our UBS. next Mittermaier comes from question with Markus

Your open. is line

Markus Mittermaier

everyone. morning, Good Hi. Yes.

Jim Loree

Morning.

Markus Mittermaier

term there product and overall Thank growth something that question Morning. driven Or security dent you data up France especially here of common X% up? make actually ask that And What going kind from XX%, that a are the is you. exactly near business? in could security, segment in Could that Europe up on see? is solutions the COVID forward? really beneficiary if on

Jim Loree

as that's customers is France what the comments use I SaaS And holding solutions, up drive a actually they've Yes, taken the really lot Because with be. why in could my we an which that, Marcus. example. value Sure, really business the were. of

and analytics, really video effectively. business from and helping more our their and data efficiently So it's run customers taking analysis doing

ensure when in to used in geographies case business with etcetera. they operation, to rolling achieved of And the their them revenue opportunity around and this pandemic described business the discounting it's our a of they've, They work as they retail of store, with customers. located I decisions products help better out. they've they've higher of areas the sales in make if rest an the and where the productivity. are security. of so do levels a opportunities, To ahead electronic the been And And they're aggressively

particular, where the the in well. is, this business as continue and business behind space traction a France what is They're opportunity pilot this three four this can an business see of the exciting great And to be quarters So in example and as probably pilot transform American achieve. of the what Nordics really we and to as North can an business great example then some is a done. or but gaining

Operator

you. Thank

question next Bank. Nicole with from Deutsche comes Our DeBlase

Your line is open

Nicole DeBlase

good Yes, guys. morning

Jim Loree

Good morning.

Nicole DeBlase

How to place point put about action we discussion? perhaps put activity into carryover offset third? think plan both a guys that to place you to XXXX, this inflation respect the to into with [Indiscernible] should the impact at

Jim Loree

Nicole. Perfect

will. maybe we It's is a I'd So in pressure there $XXX potential highlighted bit XX $XXX give to going some the has we the because XXXX. of number. But yes, inflation And accordingly, with earlier, a this going There to you topic of right the equivalent on now working of disruptions. that's why actions there pricing benefit. million mindset get supply been say it we're the it's to out is million that the as continue, we're

You'll see have where this you'll year a benefits we have scenario actually you but, than next more wins. year, actually head have potential

Operator

Thank you.

Rehaut Our next question JPMorgan. with comes from Michael

open. is line Your

Unidentified Analyst

underlying my how versus continuing market is to your of in is & be much congrats underlying POS words, this the taking Tools sense relative could strong for So Storage strong other you whether in [ph] Mike, Alaei POS to for talk the an delta for Homan and on share related market? widening? that question. gaining about on thanks your And Hi, Can the you results.

Jim Loree

that continue. very be and to provided numbers continues range POS in in those the and robust, the back mean, in I trends that January Yes, we it's

we're now. right a we, demand that's also we that so but well, share, very occurring strong believe there as is market pretty gaining And significant

this much towards right it's short be share about think how though, right But the gain that's window, it's this And And, proof at is more. I that to or at think the slanted industry. so think difficult look gauge at rates share will way versus the stage. actual was gain growth. what and market in growth But least stage, in half to so when at certain the more gains, we're now from two tool these share GDP at to if three performance it now, exactly market related able trends of it performance not pudding, I the than the quarters is what is it, the was, probably to believe you I look if for and in

Operator

Thank you.

Our from Gilardi Ross next question comes of America. Bank with

open. is line Your

Ross Gilardi

to squeezing back more multiyear we And or part you beginning sustained to to that? timing of just second four on XX% And the then half? of essentially I in the was if underlying the Did X% just a minus push the took the the about want leave a tools be up, properly. five into expansion? second the down. just could interpreting half sure in you I that's issue, for week contraction I to for comps formal change? restock still Thanks it's have storage, do And wasn't second to your really and morning. XX like some feel in. it got for me inevitable half just point next good ask months, the outlook you just Hey, to XX at but an and because so you've markets that's the the remarks because running hot, really

Lee Mcchesney

Yes, assumption from change that I we the question the will. And we And underlying half we year. just inventory demand did not the but of we put in we, the the back did that part of the of benefit January. restock second

office first where bit we are Jim as strong because stage? all of a this the going out you that's of part well. robust big think on work you your I to while. a a So progress is an and to an the people recovery a focus view at well, update get us various think provide different think I that going the that to in all on the, environment, front the very which geographies, And even ask opportunity a when to where to the I intense market, that's back has next really part really basis. a point the many see will I we're in time are we a we when homes, of on happening a of look are to at personally, question of in pandemic, hybrid he leads that's this days, coming as And into us are we because opportunity the through July, little comment for I that and dynamics in know as on XX have of continue their still

where And is really at needs across which want habits have I the mean, we home environment then really, but to U.S. there's same tend and you as to things talk bills and potential just, over area lot about investment, that other you meet thinking infrastructure of countries, about there thing could So doing a both the next months globe. XX to personal have an are an work behaviors. the a sufficient massive to the large infrastructure, XX like major the months. of be

So you a globally. influx the U.S. as see that can economy significant and in from both well, the into

the for continue there next to months? I I path XX% to about there's quarter a continue. dip months Jim? years. think the And growth going to it, the I two sit I we're and and So demand the every three But this think is here really don't for that wonder, feel do we're to more when three to in Obviously, XX%, years. going grow for next growth X think more XX see I the coming a strong like to next

Jim Loree

of that. a kind my more secular I to Yes, able to solidify normal, you've the type I it, say would covered the done. on, well thing growth in the environment everything know right particular. trends then guess back after best just think That's now, But I about and I we're base, only be to is XX% going to kind of I, X% get very based think

DIY. number the all them. what whole have mentioned with generation You that DIY, become a familiar think of different But of people we of resurgence of things the a there's now

whole We tools Decker, to their using of Craftsman, and add Black are DeWalt that to people generation that a have [Ph] continue collections. will other other &

there's and for electrifying small to our And the the in enjoy we seems electrification way. off front engine the know We Don acquisition, that which our then and big of garden do the we'll urban Street half taken that of reconnection necessarily have that. referenced. to about be home MTD the terms in There seems closes, course, Journal in gas that executing Outdoor guidance. page Wall close in the assumptions article a of will today planning second we year, exodus. and when in big when the option, was with be a is this when And don't market, not the

rural from and is as sales of centers into and that generational a that. there's exodus that whole of urban And as on and areas, gradual So notion home tremendous suburban go on a well. result amount thing this improvement And, of on. and on and home a

just the base believe preservable. I So is

I share, of preserved second think in had half took is the I and base is our phenomenon. the the company great with which other my the the but an forecast our there other an inflation half, our in a and we things have we'll all a to my side. for view, definitely on increase. e-commerce, conservative to general likelihood, some gain And, that And share think see e-commerce uncertainties the we second in guidance, very on-going just that out and prudent we approach our on-going, relative

on that's probably I a to XXXX in is going And see. looking balance, think miss for So contraction anybody boat. we'll big the

Operator

Thank for to closing Lange you. call any I turn the like remarks. turn Dennis now over back to

Dennis Lange

Shannon Thank the me have further you. contact any call. they thanks. calling for your We'd participation this in please thank like Obviously, to and on everyone morning for again if questions.

Operator

This participating. conference concludes for Thank call. you today's

You may now disconnect.

Stanley Black & Decker (SWK) 28 Apr 212021 Q1 Earnings call transcript