SWK - Earnings call transcript Q2 2021 | Stanley Black & Decker, Inc.

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Operator

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

James Loree

Dennis $XX second during the morning delivered This off announced we record collective quarters. four our last XX,XXX this care performance with good Thanks, and XX growth they the billion $X.X to over period associated have and the is now last Over the colleagues. team Black have and agility their through capped our a way a impressive, which challenges thank communities, historic quarter people, are months. up morning effort it's revenue many resilience everyone. a of are executing & Adjusted we we billion great in Stanley the I LTM global this and XX%. growth them trajectory story. pandemic. reached added margins margins excess of massive over in Tools approaching run for of tools billion at operating stepped XX% cut proud sales a $X.X My The operating taking We outdoor their new including Decker rate. dedication, on of growth of heights customers, our

transformation enabled of us full currently organized auto in billion. growth. revenue. brands been and aerospace. double-digit organic The as the second and ending secular and continued same businesses is to power in organic revenue strongest to organic The commercial the double-digit and regions positive delivering chain technology provider tool XX% the growth The strong trends in even straight backlog strong such capitalize back the and three a of quarter [ph] the quarter in XX% support the company in Industrial automotive, gains OEM continuing. tool as delays were were have supply these world's converted markets. XX% We're to depressed first are successfully growth a production rates the by accelerated and had of segments of opportunities behind accelerating with best innovation these to the cyclically growth quarter robust shortages, excited marked electronic the levels. and not achieved up $X.X would few revenues growth in our years for of general Order growth share strong and component enabled a and last markets our in industry. delivered businesses second organic double-digit end half on XX% industrial time demonstrated the XX at elevated time the Security organic All was security Turning execution have quarter. record and growth versus up year achieved We beyond. to the leading to an prior about markets XX% growth XX% tools data all all growth its related into backlog quarter, if recoveries in executable to red-hot the team attachment the record potential more and robust the extraordinary

basis XX% a second the XX% over operating XXXX, at leverage, $XXX costs price free for adjusted margin prior record versus better resiliency which $X.XX, prior to points and inflation transportation up margin the in for strong on from a flow company was year cash remained commodity up cash required quarter with overcoming expedited higher cost our over quarter rate year, setting volume $XXX the overall the in and free more benefits mix than $X.X demand EPS of Our XX.X%, a investments, was Adjusted from record million, serve flow the million year, was than prior XXX year-to-date quarter year and up strong growth innovation and billion. at basis tools.

heels a that with reconnection trends is the second capitalize key growth, On health and to positive safety. this and great the on driving e-commerce, a electrification performance, and garden, and consumer that are we this home enter well-positioned of half with portfolio momentum

prior above versus year increase with businesses across our investing XXXX we our guidance year $XX.XX are end, We are to midpoint. the to capture adjusted And that at range expansion. a these enable full $XX.XX sustained and to to margin share, opportunities market growth EPS per raising XX%

of in dividend to The year. a XXth consecutive have increased now the Finally, increase. quarterly confidence week we reflection the cash highlight strong the consistent to stands XX% of our for is key A our also half excess and element to which continued represents payout is share deployment $X.XX shareholders a like the return company. a I'd with approximately proposition capital power generating This the the at strategy our our we last shareholder growing value is capital of a of long-term. over dividend

notably major million some well. as increased to we of are repurchases to employ Board do shares to that, the our course, repurchase other do authorization flexibility our and last Of that XX quarter vehicle us the giving could

to that long and for trends rewarding These for showcased a several on into foreseeable growth which catalysts XXXXs are Stanley key represent opportunities Black & During our runway May of future. Growth the Summit Decker. broadcast, we capitalize continue expected many significant catalysts

time. in home new urban home are tools existing with key driven reconnection drivers and associated We some growth demand the and home for surge the household by strong and across the that cyclical in with drivers our market formation global sales expecting be consumers support garden North as to exodus. the secular America the markets as improvement, tools expansion continue Including will well and

never tool we Across company. more differentiators been investing trends. board and and we sales capitalize the market better million to have marketing world's than are make strategic that e-commerce, We have in innovation, others, leading on us $XXX positioned the

operations Decker, category our DeWalt, and and record Black stronger. innovation, depth, FatMax, and market-leading a brands, & to has and Stanley, Craftsman, iconic excellence development our never Our channel Stanley pipeline been track commitment

maximizing advantage We Flexvolt product are expanding DeWalt of the and our categories years. flexible platforms, are output power power down to detect cordless number up users new next plan these the with platforms the and the we nearly our products leader on and product with in over offerings spectrum industry to three double power

V over pandemic platforms XX dense technology e-commerce brushless leverage to years. The industry which the enormous the available power offering they most the just delivered in Xtreme ratio across already breakthrough the acceleration platforms smallest and getting to times positive are of motor power product for an have in the V highest platforms and compact massive and share us. expand demand Atomic X these was started. the and amplified coming will was shift These roughly to and weight during deliver the gains significant XX Our products

Decker, Black ESG as billion XX% re-imagines in We a significant coming largest investments to our opportunity is our in has of breadth sales license about years to means increased next an compelling buyers a have brand. as months, channel. brand now for e-commerce XX iconic & see global the $X e-commerce to and tool portfolio. talent, of what in from share our & climate Decker multiyear play We a approximately to drive well. continue very the we for us closest brands, This of is and over a that grew the and which e-commerce the a lifestyle as doubling and are revitalization categories going Black business shift and our of an competitor youthful on e-commerce team towards within three to it capabilities, matter down our The times including electrification that opportunity XX% more as in the digital presents we focus

been provider first has platforms transformation half solutions data gaining Xx that per business to momentum, combustion in an excellent. engines safety, timing solutions And The the battle content in is from creating done ultimately products health the on and and driven, year, move hybrid into is lastly, has and world various and never XX% a engineered over technology fastening significant our equipment a as become results the focused power the EV business continues job security grown team pandemic. great of the to outdoor cordless to the has which relevant more the are existing Our of internal increase and vehicle.

we opportunities, In are these addition with momentum to program. Margin gaining Resiliency growth our

find update our applications approach margin a deliver sustainable use cases a continue MTD. for technology in new coming that now And expansion on to runway years. enabled and to brief apply will We the

remaining more capabilities bring in you is many energized leading in brands just of the of the were came in beginning for runway away technology, independent growth XX% opportunity opportunities and opened our we the and This month. as know, and innovation for at MTD's access this to capabilities up MTD dealer synergy deploy acquire and as the exciting of The and in As brings outdoor. in Operating the hand outdoor by week equipment, fit and superb product strategic Model scale. power even compelling. and beyond. engineering last We the well the channel electric are global MTD Ohio apply ability City, outdoor is expertise Valley and as category, in as cost pipeline to and glove SBD well robotics at our manufacturing revenue XXXX to the facilities the option as

margin we approvals, execution MTD come detailed negotiations begin for now tackling in to regulatory MTD, with and opportunity expansion currently they upon and the details it Allan work hand a offer subject to on are successful on a quarter few closing. multiyear And on We and to discussion growth some I'll on option guidance. more up will XXXX to results, cover this a and conclusion, all should Don? second financial Don over

Donald Allan

good you, morning Thank Jim and everyone.

Before I this we as to few X, significant remarks leave related transaction. a about exciting mentioned, attributes make want to Slide potential financial Jim some

achieved June have X.X% First, this EBITDA great of from XX single MTD LTM period. high over XX, to in and over Spotlight have digits improved the initiative seen They $X.X on approximately last approximately traction billion. XX XXXX months their ending their rate revenue

throughput by meet as the referenced about I challenges and tirelessly shortages. larger worked pandemic, has products, on to chain as MTD at well input component Day, the As brought limited Investor including supply

year muted Model. in our with Operating improve believe output medium-term. account Consistent into the million become these revenue manageable our outdoor temporary and growth taking months. our per combined can XX organic the a last that we Investor growth to the We disruptions that and in However, deliver over their Day SBD believe application platform and MTD this catalyst of with diligence, recent can SBD has $XXX are over

to for assumption planning continues Our for the call MTD. XXXX addition of

consolidated in prior billion XXXX. this currency XXX the of can currently globe in performance operating own consumers X% margin Europe $X.XX or organic with on and price would accretion in an and our just our contribute EBITDA the XX% was EBITDA $XXX Tools Considering QX, offset innovation we P&L brands, basis believe driven stronger professional intangible transit by in were our expansion, North result for this costs was stake outdoor X%, approximately extraordinary adjusted and X revenue adjusted interest robust XX% and $X.X progress segment of This approximately partially benefits strong incremental of and adjusted over continued of in by product in in in and EPS growth the and amortization e-commerce, America, XX.X%, assumptions, benefits growth applying up again markets. & in penetration Assuming emerging return of contributing million margin strong The serve margin to addition increases forecast EPS with Volume, also in from pathway on new carries with for XXXX, and to global points. our a XXXX. to business will XX% points this take rate into high across With a second garden. revenue the I over levels that robust The of home in the innovation XX% expansion, reconnection Tools XX% the the up delivered continuation now expedited by our accretion versus our teens. $X in volume P&L segment & and quarter. demand result ongoing year Storage a XX%, realized higher and inflation, dive and electrification, was results price productivity growth deeper up the additional year. demand, growth investment and for for our growth investments. across Storage commodity this

organically consolidating. gain the see still remained Professional the in platforms brick-and-mortar normalized growth XX% and continue half the e-commerce across and quarter in and below and inventories are U.S. across retail retail channel products gains the POS to growth ended front leading We quarter. with are robust the the share levels. share second our up

coupled XX% industrial and an our is and to All The XXX%, industrial American industrial professional by specific channels The contributed and tools due trends, professional realized by company share up brick-and-mortar, growth. to UK, in accelerating double-digit growth to experienced and demand which organic led XXXX. and XX% business commercial, the North France the rebound, and e-commerce and respectively. with The marketing manufacturing compared by share expansion positive gains trends again once commercial drove customers. growth channels, strength XX%, construction our of and strong first demand. with sequential to half driven production, European growth, tool XX% organic positive retail XX% was POS digital XXXX The supported while up industrial driven were efforts approximately gains Greece, regions were the in

emerging was to delivered Finally, Asia at respectively. XXX% XX%, region Turkey organic least organically, up and at another share all by least construction markets the with contributed driven and growth nearly was gains. Latin higher America countries and of X markets growth, over related Russia up up demand, across XX% all double-digit with organic times. India growth XXX% delivered and with solid performance doubling XX%

our driver strategic As we highlighted are for further and the initiative Growth our Summit, May a invest growth business, expansion. to e-commerce for at is continuing

result XXXX Second up e-commerce versus with quarter global was a growth region. nearly double-digit revenue from XX% each

SDS-Max and X Power and industry-leading of we Advantage, growth markets launches with world's DeWalt. attention breakthrough our breakthrough enabled first overall inch a combined innovative our from to by chain as Flexvolt and Under new first our growth Stanley and the FatMax both relentless will had Turning & leader XXXX. many the organic which the V Tools was Detect, delivered our DeWalt XX% innovation, SPUs, of includes once supply benefiting and Xtreme. you introducing the to XX supportive execution again battery brand excellent This product across Flexvolt be this DeWalt catalysts. contributions such in Craftsman, a Storage This XXAh know are and performance. an as Tools innovations. hammer, Atomic three SPUs was was Power

and a million and to over Our platform up to that a is $XXX products and remains growth now revenue. Flexvolt is key in XXXX advantage unique leverage. continue system we It driver represent forecasted XX is to

Black about and breakthroughs tool with passionate more products are launch robotic also & innovations & power cordless XX% by Outdoor our driven the the and leveraging grew This the expanding and are is in brands. be Decker regions to The We Craftsman listings Stay Europe. contributing. horizon mowers DeWalt our on organically pipeline mower in innovation in pressure continues walk robust. and tuned behind Black offering all flexible products. the new performance technology under our as includes Decker, This washers, for business

other future expand are growth, and the encouraged cordless our through technology the continue We drive and very category outdoor to product innovations to about electric pipeline.

the XX% tools, fueled brought to accessories, tool the accessories new well new grew measures Finally, tough launched market. and and hammers, series We by storage as organically, hand market robust as demand, product power new introductions. DeWalt tape and

auto Storage our construction, further metal our In fantastic to disciplined Tools & margin growth all brands continues this We comes of within industrial you & resilience Craftsman expanding It and performance the chain the globe team's three teams. both are of with offering Storage across SPUs. markets. and both solutions and performance DeWalt important, and addition key Equally result continued Tools summary, and and storage as teams. innovations supply Thank growth price the new plastic the in strong of and as execution. across across Outdoor a a for was

versus productivity were rate an quarter. oil investments, inflation, Now choppy delivered growth with XX.X% includes commodity growth an point price as which volume, by positive and This aerospace. The divestiture. X increase of basis sequentially and X% currency, growth, year. by of improved segment well Segment gas offset organic point volume, X XX% turning This the operating of growth oil partially the and as and product was XX% Benefits line margin to gas, partially in from points in was revenue markets from offset total Industrial. XX% prior XXX price. and

see markets. to industrial continue this Looking up as automotive end fastening were organic within segment improving engineered we XX% further revenues and

XX% were system Our and automotive organically. up fastener sales

very the Out to light outpaced OEM disrupted to due gains. impact realized OEM automotive to fasteners accelerated global the soundly global continued semiconductor and revenues which slow we regions level, industrial continued growth was business as revenue quarter. they up second in organic an production. from throughout capital and markets approximate Our shortages, of X%, second with manufacturing index. At quarter. plan versus negative vehicle improving XXXX, fastener XX% contributed the consecutive systems had activity. industrial up X All growth outpaced production production, plane global behind positive was vehicle quarter significantly nearly new quarter of business and XX% share our a the indication production Industrial second organic double-digit fastener growth and segment the investment. versus growth limited in deal the reduce Aerospace The recovery point

However, the Infrastructure Attachment horizon realized and independent and in at Momentum tools recovery organic likely backlogs revenues on in the increased XX% which demand. OEM is was with and XX%. were to dealer build to growth, expected order customers. dealer this market, in strong by down driven continues begin independent our OEM XXXX. rates

up the with by a X was we XX% in quarter third decline point impact North This point last America to offset an point XX% Shifting than recovery total of [ph] to more know a international market by was and construction. revenue is was partially organic related to XX% the completed see a is organically. and Security, offset and contribution currency, from pipeline a new reduction X volume, cycle Overall was decline in in yet year. dramatic longer activity we positive as X divestitures the there However, that which a pipeline in oil Internet, resulted from XX% This in gas. up price.

data continue get to organic and doors able to access and solutions XX% that strong as growth restrictions to France, related these also strong in European customer security. pandemic healthcare. a within markets installations. driven electronic gains have considering commercial the automatic growth from benefited our Nordics, still many within sites, America North backlog impacting of and better was product up new We performance supported we're convert

technology, in order was the to quarter, execute Our grew build to digital continued XXXX. new which XX% record Security price offset when inefficiencies rates X growth other to as well. as impact as inefficiencies rate rate as X single versus contributing second were solutions, SaaS volume as prior reaches the Overall high, high segment believe and down pandemic transformation. by backlog options. XXX gains positions these profit to final and remainder this year Digital than the of approximately Solutions the revenue deliver the from We and and related points its business X.X%, quarter digit will the end with and more momentum, rate, safety expand profitability cost of a contribute the basis such business the larger a pandemic growth will we touchless for restrictions, health continues stages, growth growth, Overall to and required points executable dollars the investments the business fade investments the charges see excluding door organic of

McChesney to review Lee? call Now cash price update will and I our an inflation, Lee flow material transit on turn the to actions. costs, expedited and

Lee McChesney

you, and Thank good Don morning.

year review to performance. improvements Free Moving prior prior earnings partially by and and to Slide performance The performance was and year. higher working operational brings flow cash spending by will robust are X, year-to-date which quarter offset was cash driven growth quarter capital our year-to-date capital we second flow versus million, versus and $XX predominantly $XXX the in million.

as X.X, accordance the for efficiencies us. positions versus to with We and our turns hit are and Operating customers revenue strong year, the performance. Model unusual capital working in investing demands, prior in for a well Working the SBD serve delivered turn improvement improvement capital inventory as reflecting X.X

generation full well performance, to the free for to expand capacity had million versus great and drive record We flow, XXXX. resiliency are up growth. start year will $XXX further the and deliver XXXX for also margin and confident CapEx cash as productivity support that making strong cash over remain We've we to investments flow a year

X. Slide to Turning

measures. side share and I'll commodity SBD's and regarding page the supply some the On the insight environment of left counter chain

to of top to for fairly global includes serve improved in of the assumption. premiums expediting in the of keep expedited containers consistent the Looking million what in as front included These our half tool market. and and we for supply level for XXXX we've hot transit supply margin an presents will incur a such items approximately This year. rebalances the pace beyond. securing realized air of opportunity costs The the have cost chain alleviate $XX spend should at our savings the and slide, second demand half is with incremental freight we as to improvement and chain costs that

Now million. moving about second elevated for to and steel $XXX XXXX. we prices, to prior commodity year versus the inflation, $XX million In continue commodity $XXX expect is of million million inflation approximately now the driving up and particular, assumption the and see commodity $XX in full of costs half this elevated our pricing million is for largely $XXX increase,

incremental Now productivity partially pricing discussed actions time. headwinds to identified taking the we in and offset that at April,

are headwind. now in margin fully was margin third not position we that have better The implementation price performance. believe and a the volatility Netting of the carryover full versus our goal $XX guidance so actions material XXXX savings $XX actions guidance. absorb during XX% place and in prior better to quarter, of that XXXX of in approximately to be benefits the have should million finally, carryover or effect offset offset We in also support is to to mode, inflation included resiliency And and a the price inflation. a the we is realization neutral

to back it turn back will I revenue to cover our half. assumptions Don the for Now

Donald Allan

overall by the outline Shifting and year growth side assumptions, will full Lee. the both rate segment. the margin Thanks to right organic I and of now slide, hand

of range total is to Tools XX% primary to growth XX% raising company outlook The Storage. prior driver the to organic XX%. an & improved for versus XX% are We assumption our

to visibility to and to levels. channel back confidence continues Our historical strengthen for addition market in inventories sustained demand bringing

is the consistent which raising by our delivered change customer in we primary oil mid-to-high digit results versus the is the Industrial continued single for prior organic as outlook are with This segment XX%.This as and what just second the April. than The The the for well year. of which second represents moderating organic is are second range, growth global our half low We for in mid versus digit assumption XXXX, inventory, impacts the slightly the half quarter, estimate as mid as increased of demand. front organic digit in half, assumption of the gas for to strong XX% the assumption our in low of XXXX. supported single which well is to XX's remainder lower about growth XX% to factors expectations the single from the in growth

Security are Lastly, single safety assumed technology solutions, record for strong commercial in is organic is and business. growth offerings, digits. the and half with high security to electronic based coupled health and data be and product backlog encouraging optimistic our a The second for we

are We company entire for year-over-year. will points the XX to rate margin the basis assuming XX improve

investments to the XXXX Industrial one, We and key margins second Storage two, drive and increase even in expect the the year-over-year, new Tools to & expected given; some of significant half; pressures inflationary be growth. relatively investments. prior to the our through we as from growth well will restrictions, year related key as manage the to as margins cost the Security inefficiencies impact flat the The pandemic

transformation range are remaining of inclusive guidance to facility functional and $XX. integration to adjusted and initiatives. $XX.XX to earnings time the a $XX.XX $XX.XX, to the be On increasing to to deal assumptions charges of up related share previous from moves, I’ll an X. the basis, expect $XX.XX Now we costs up the outlook basis we EPS range per GAAP one on $XX.XX On various summarize Slide

of versus midpoint Our reflects to EPS as visibility revised expansion versus year XX% the as just demand XX% XXXX. at calls half our of The well Storage. adjusted and updated in organic as XX% outlook to growth revenue improved & performance prior and mentioned XXXX guidance Tools XX% first for strong

support our Walking improved EPS improved $X.XX. on to make guidance, and from meet net required our in second capacity side adds demand slide. midpoint are drive half chain, our to of right our costs April for half continue hand this the the adds $X.XX, second from second to quarter leverage performance transit expedited the $XX.XX volume margin of EPS adjusted investments The drivers resiliency supply initiatives. catalysts, We growth increase the outlined

commodity our Lastly, in price as to a and Lee net actions, increased referenced neutral earlier, offset impact to our guidance. realization strong inflation

company of net pre-tax side start this year, of and and disclosed expectation chart, current we in the for our to will And left Behind share M&A, cash adjusted be earnings we the income. below strong approximate approximate we for flow full flow is the to believe earnings. free XX.X% On per significant quarter's the other cash modeling. our the have assist likely reiterating to line year assumptions GAAP the your lastly, billion expect with approximately to free items third year the $X.X Therefore, XXXX. charges

So calls XX% strong to of recognized are in This company XX% XX% and XXXX. we to this in adjusted organic means continue yet navigate. guidance year-over-year probably for dynamic trying balanced, you growth summary, our all in what the environment of is EPS Many revised the to all XXXX. expansion, a revenue operating for for very XX% expansion gauge approximately to

in XXXX markets the While it is for in in accretion grow that a outlined to the call time, too core to addition I of early objective make to is mindset our MTD period and earlier. our earnings

current impact a from heard and a price a are cost great expecting commodity neutral these perspective As Lee, in XXXX from we you items at in position are from prices.

commodity above organic resiliency organic well and organization in that, growth call we at with and margin heard that price increases now top organic remarks. several XXXX. of generation, long-term. over in key share you we and with turn operating in We in response Operating for remains me operating inflation with company revenue focused catalysts Model. believe we driving is execution, and set and growth flow our strong The have summit free With to our programs deliver summary returns I positioned is over give our growth, a growth a invested implementing to day-to-day quartile confidence earnings the cash will the leverage, SBD powerful resiliency as are market back in initiatives to Jim to May, on achievable Additionally, prepared margin that the of accordance the conclude are

James Loree

with these the is had innovation flow first and strong I'll right half strong home summary this very very as Q&A. as commercial positive e-commerce, get We're to of and pandemic, trends, accelerated and about so with look of enormous which organic array given several reconnection by an been to capacity on momentum runway investments to health I'm funding growth, from strong the and cash amplified and the create garden, and electrification, safety. remaining and as gains. Don. strong our growth XX outlook, generate a to performance, efforts EPS acquire delivered significant continued uniquely and organic multiyear to you've has the improved we to reflecting the and in the positioned revenue potential months. our opportunity significant potential we've last growth MTD and keep continued Thanks, secular this share by over consumer excited exceptional support to and portfolio heard exciting and to future, the And additionally, And we catalysts. accretion. as built XXXX in option trends, benefit seen team's and capitalizing markets finish vibrant have growth stake margin pleased the a we the brief And the for

stronger. in Q&A. differentiated the our ESG been becoming social or never of one companies has as Dennis? performance, commitment elevating and for conviction known are and ready we passion for responsibility, most corporate world's And to now Our innovative

Dennis Lange

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

Operator

first Wojs [Operator with Baird. question you. Tim Instructions] from comes Our Thank

is open. line Your

Tim Wojs

morning, shot Yes. on Hey, Nice the first good half here. guys.

James Loree

Thank you.

Tim Wojs

in DIY my on tougher My as particularly you're maybe could DIY guess that Pro, comps sense can confidence you mentioned that around elaborate what improvement about markets, starting organic of with some Don, back, And on really just you're now maybe the in is or you on or just in right some questions XXXX? to, seeing market? the my hitting dovetail color versus if drivers is you both about

Donald Allan

brands, Yes, we're quarter strength I year. look everywhere. the to seeing professionals, I starting mean, and in you in think the last our fourth seen professional we've when about across But really ramp strong think interesting, activity and all DIY a way clearly of what's

saw across you organic So mentioned growth robust strength I the different numbers. geographies. the

you're brands. all seeing the SPUs, You've it seen the all it in and with

it is is and continues the be need has very products across our activity the really certain and And Delta But actually a to The what's maybe could knows intense, at a side continue on down activities is with The other happening time. us both and activity the period professional globe the obviously continues well. the slowing variant, excited expand countries very DIY the trend how of will what as potential side. the professional to the that for how for continue. long for stimulate a pretty pace strong. activity continuing to to so in on expand Who U.S. still and rapid DIY DIY

good with So seeing going talked we'll I -- and feel said, XXXX, we half, about all detail growth Jim And here May although are I fair through I hurdles growth back get a some these it deal very in growth in tough in the believe his is and went as then do strong. comps, well that a you opportunity. opening in we're trend about we those demonstrate today, the excited summit, way us into markets amount the them to and combine sit there mean as of about we pretty today the with our as initiatives really comments

even which slow, to we growth which us those dollars demonstrate see of we particular to think organic is earnings demand has of hundreds have does opportunities across if potential excited, the millions areas, why and start growth So year. of next we

Dennis Lange

Shannon?

Operator

Thank you.

question comes with Coe Research. from Wolfe Our next Nigel

Your line open. is

Brandon Reagan

I on [ph] selling curious just position Brandon had is potentially was news kind $X any Coe. that of Nigel guys This for Chubb on the carriers morning. good you Reagan if for billion. Hey,

about Just wondering options? the on any security your if had thoughts influence this

James Loree

it a interesting price. minutes up an just phone is it question, it's to a, nice because but XX happened very see it's about on a, flash that's ago, I Well, my

billion, still two First EBITDA very as be equal. all more, we consider than a least not times if adjusted XX.X little more is all, but else another at business LTM much bit, turn probably [ph] We of must worth or probably Chubb our believe $X.X multiple. high

a think thought it perhaps So that is pins business we on I our evaluation that you know, little higher than was. even

of And so, retention now evaluate the in obviously of disposition between. the to continue question right or whether be than business And news. are something the direct digesting other response will they we business, options, no your there's to we

where now. right So are we that's

Donald Allan

its Jim as we said, be before really on those initiatives for comments year demonstrate trajectory to really we And that growth of will continues growth past this And into business as full I digit organic leverage. demonstrate And with looking operating single next is us of think my to business it. pandemic was the the as profitability amazing we'll could with at that that describing the the investments some growth have growth we excited high come year, organic in XXXX. that is these as new decision a performance is would will growth for the more well rate with start make restrictions in get QX,

of have we best the worlds, So I both guess.

Operator

Thank you.

comes Rehaut Our next JP Michael Morgan. question from with

Your line is open.

Michael Rehaut

everyone Thanks. congrats Good and on your morning, results.

James Loree

Thanks.

Michael Rehaut

if line some might million to if wanted $X.X looking negotiations just a topic. I talk MTD how do assume see combined the intend that see option about, And there I nicely, business opportunity maybe of, to how in opportunity seem that the then us of the type supply wondering talked I the organically? lot in and to a up share -- and for I might you But you that moment that think nuances has give you of do $XXX basic there the your not on kind blocking too MTD, and about had many have when company a tackling? and grow was more as cropped share of I if regain any are maybe curious, types of Yes, you just about I a perhaps we issues. aware more top mentioned, into you it people any this talk you market growth was or one billion XXXX had Number kind exercise. you you basis. broader organic just is with issues straightforward for a kind chain couple was be of for just not, encountered questions at that burn relatively grew exercise could of, one, it, can or

James Loree

one, of lot a of lot a them. tackle that's questions in but packed Michael, we'll Well,

XXXX and things bit demand First of to large equipment But minimal all, that was they continues providers, grow nicely supply and traced with was a like issues. issues, chain shortages, some like shortages have and struggled many that. labor for the pandemic are be can also there. it related market -- and be entirely growth they component to MTD the there itself in did nominal, The

as turbulence Some may come companies manage had with that situated same you lent have for successful our growth, the all have and companies in example. to in itself ways them been out through see great the the not might wherewithal Other situation still business outcomes. can to or have tool not

looking the nothing I do and going week little brands of deal mentioned, the able And the the products product brands regulatory so, that are very, I chain can strength bit share marry, cetera, be when strength fundamental it I you yes, a at products, there Decker we tell & the because we loss of and as combination. can of products company, when headquarters very And the the visited, spent and innovation with marry last and assure has with supply this they've of you it's the was of to that themselves. hours successfully a issues, mean, with but their with up their we approvals, the couple exciting et pipeline. to a Black to come Stanley already, completing I

issue. the So concerned chain being we're a long-term supply not about issues

took grown times structure, has that EBITDA the formas amount you those. do them. times, the to the through structure to stake We have pro formula. expertise predicated significant of that's XX% scale initially if time EBITDA, to with our resource was since back the of the that our in so and mean, The help and a manage incremental We essentially we really, the on X.X multiple bring think for the a negotiations, them included I

increase to share should So, X.X times growth, we that EBITDA over different the the EBITDA, course both that together the them work under help we ways increase. of theory the so in time

which times, ofXX XX%. for is we is paid times half X.X so, the what And

the to was boils as maybe as certain types or to see down of like EBITDA, in only due the debt formula you items, diligence EBITDA GAAP that which of based for maybe liabilities those we significance a would would environmental and from get things, adjustments an or some well So negotiation which really, here be adjusted to tax on. items, certain there

they business, that have, So, be, one had could a didn't actually or modest down to of would quantitative of financial loses to the very a benefit formula be EBITDA. such the do of shut that most amount their that and example say this, anything they folks strategically that's there of their that but some been robotics do not have high impair decreased increase the since adjustments their that which but R&D, what's asked the temptation could could company for fundamentally price. for being so, money them integrity was have formula, would instance, We and the purchase they've may negotiated. sort, And financial, for

Operator

you. Thank

with Bank. from question Nicole Deutsche next comes Our DeBlase

Your line open. is

Nicole DeBlase

thanks. Yes, Good morning, guys.

James Loree

morning. Good

Donald Allan

Good morning.

Nicole DeBlase

of I moving than year. full So a pieces the of normal bit obviously there's EPS, contribution and year XQ this guess a lower clearly the XX.X% lot

could think bit and the you of just of went about a of the to like for year? price margins the XQ the that little talk maybe freight So the costs through does costs, rest about XQ, how differ, impact cadence if you between when any, and

James Loree

price the quarter, the I quarter Yes, to end and between have discussions sense customers by differences sure third throughout continue third be whereas be should in obviously material of of and that fourth the to quarter you the the pricing, quarter. difference third the the say some that timing our the on Nicole. completed with of we wouldn’t Yes, have implemented the

in quarter of bit a impact you quarter little full of a positive. cadence So a fourth with the as have that

will that be So, helpful trends.

of year, QX of mix the to just You in an going tools decline QX seasonality in to anywhere point versus and the of margins the also plays QX business out basis point way that every QX basis QX. and in XX activities have mix in something versus promotions other from result happen QX from that XXX can the

of XX%. those factor you in between things when in so, tools back XX% and margins types the the think be And half will somewhere yes, we

on be point around will and average. of range, of point So QX around high low that XX.X% range. the be will roughly that the QX

so described. that that's think that right dynamic just, And due to just it's way I probably the to

The QX, a businesses other QX to modestly as in improve far continue two QX profitability significant will to way. and their rates, as but not

color helpful probably in that area that's think you. I for So

Operator

you. Thank

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

Your line is open.

Ross Gilardi

guys. morning, good Yes,

James Loree

Good morning.

Ross Gilardi

are, is is guys go Yes, gas which side your own wanted up but part to issue, you supply a MTD electric, share a of characterizing of to you're to back bit, issue I just it battery clearly powered reason outdoor the as probably as equipment revenue more outdoor business losing the and XX%.

So revenue a if they're cordless. just I correct to share powered powered I'm issue. wrong, I'm a for MTD purely gas company ceding equipment today side confused equipment a is in as that shortfall me characterize the little supply bit gas and primarily, mean, to you'd why outdoor as

could So that just little elaborate bit a you more? on

James Loree

relatively equipment percentage it a behind specialize business gas as of as mowers Well, dollar some mowers total. MTD limited The riding was higher have but walk and in that. folks end and if make only terms zero-turn in and powered of simple of basically

So electric penetration roughly about into riders pretty has and constant. X% is and zero-turns stayed

range we And gas XX% that is paint can't know their that the mix makers some you very during heavy And companies XX% that brush powered. include with with, with, that other grew. MTD familiar that painting quarter. we these to them outdoor grew are in So we're one, because number equipment power powered, gas that

is. is what to shift it It's a electric. not it So

we're happen are this later execute and We to will that's on this make at point. kind where able that we if of

Operator

Thank you.

with next Eric comes Our from question Research. Bosshard Cleveland

Your open. is line

Eric Bosshard

better. a the understand Good things love morning. Yes tools business, to -- would two just on bit little

they're inventories if then your making commitment your all, about you. sense where your Thank And building you of and interaction with their that, standpoint, inventory, could two those secondly, would expand to on great. on First be from retailers, just you're you here share but focus talked notable the market most from progress? a areas that

James Loree

on resources market and regard. products? to there's by are is street the about sales love on talking in brand, far you is share Eric, hear progress, brand that competitors? investment Craftsman going two of exclusive, that one that's a look and battle the say, I home you DeWalt in between and kind mean, think centers, DeWalt about and player, we feet exclusive in that but brand, a of a look your much. strategy I'd in a of than clearly, picked very talking at Are commercial TTI. I'd as with on Ryobi strategy intense as that Milwaukee, of industrial Brand not the when brands, us All on a well on predicated TTI the above? lot and we opinion has Craftsman and terms When research. based we stronger believe Ryobi, you actual lot a to at and stronger but marketing an

investments progress, New on So, that's world, Australia, the historically Zealand. kind focused of around it's the setup there globally. is TTI largely making and North some but making on some America

make we're those are that's keep stage as of the have The as at the I more future getting optimistic they we about we to And as reminders bore. I think love and there. operate we interaction are And, retailers that system So out gain our inventory think around yesterday. the we kind adding share. supply would factory far plants full need capacity, with retailers, on looking on this and can that perspective, we're the world continue chain from help. components their we to working sure and components needs year, sure enough that will also several adding and we're that We're serve all making a expediting to all

really with to So are interaction and we product doing we're of everything retailers intense. is can it's kind meet that, People great, their needs. more do seeking

Operator

this over turn Lange session. Dennis like back to I would the And remarks. closing you. question-and-answer the now to concludes for Thank call

Dennis Lange

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

Operator

you This conference Thank a concludes call. Everyone today's participating. have day. for wonderful

Stanley Black & Decker (SWK) 27 Jul 212021 Q2 Earnings call transcript