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Manufacturer of industrial tools, hardware and safety products Stanley Black & Decker released its third quarter 2021 financial results on October 28, showing continued double-digit year-over-year growth fueled by large part by the company’s Tools and Storage business unit.
The New Britain, CT-based company reported total third-quarter revenue of $ 4.26 billion, up 11% year-on-year thanks to volume (+ 8%), price (+2) and currency (+1). SBD’s gross margin for the July-September quarter was 32.6 percent, well below 35.7% a year earlier and 35.9% in the second quarter. The company said the difference was due to accelerating inflation in raw materials, transportation, and labor required to meet high demand, which outweighed the benefits of volume, prices, productivity and product range.
SBD’s organic sales in the third quarter improved 10% year-on-year.
The company’s third-quarter operating profit of $ 493 million was lower than the $ 637 million it had a year earlier and $ 642 million in the second quarter, with an operating margin of 11. 6% in the third quarter, down from 16.6% the previous year and 15.5% in the second quarter.
SBD’s third-quarter net income of $ 414 million topped $ 395 million a year earlier and followed $ 460 million in the second quarter.
“We are prioritizing meeting demand in a universally challenging supply chain environment and actively combating inflationary trends impacting the business with new targeted pricing actions and increased productivity measures.” , said James Loree, managing director of SBD.
In its third quarter investor presentation, the company said it was increasing capacity in line with its “Make Where We Sell†strategy, led by the opening of two new power tool factories and one new power tool factory. hand tools, all in North America.
SBD added that it had announced an additional 5% in its Tools & Storage segment in North America starting November 8, as well as global company-wide price increases that will take effect during the next month. fourth trimester. These price / margin actions are sized to exceed SBD headwinds in 2022. These headwinds include spot container prices which have jumped about 6 to 7 times and transit times which have gone from about 40 times. days to 85 days, resulting in higher costs to meet demand.
By SBD business segment in Q3:
- Tools and storage sales of $ 3.19 billion increased 14% year-on-year, with organic sales up 13% (+ 9% in North America, + 20% in Europe, + 28% in emerging markets) . By product category, organic sales increased 11% in power tools, 16% in hand tools and accessories and 11% in the outdoor product group. Segment profit of $ 486 million was lower than $ 597 million a year earlier, with a 15.2 percent margin in the third quarter, down from 21.3 percent a year earlier.
- Industrial sales of $ 594 million increased 1.2% year-on-year, with organic sales up about 1% (-1% in Engineering Fastening, + 7% in infrastructure). The company said in Engineered Fastening, that strong overall industrial growth has been offset by market-driven aerospace declines and lower production by automotive OEMs resulting from the global semiconductor shortage. In Infrastructure, the 16% organic growth in fasteners was partially offset by lower activity from oil and gas pipeline projects. Segment profit of $ 47 million was lower than the $ 72 million it had a year earlier, with a margin of 7.9%, as was 12.3% a year earlier.
- Security sales of $ 484 million increased 5.3% year-on-year, with organic sales up 8% (+ 12% in North America, slightly positive in Europe). Segment profit of $ 45 million was lower than the $ 50 million a year earlier, while the 9.2 percent margin was lower than the 11.0 percent a year earlier.
Updating its forecast for the year 2021, SBD now expects organic growth for the year 2021 of 16-17%, slightly narrower than the 16-18% provided in its second quarter report, but a significant increase from 11 to 13% forecast. in his first quarter report.
By segment, SBD provided the following annual outlook:
- Tools and storage: organic sales up in the 1920s, with a declining year-over-year margin
- Industrial: single-digit organic sales, with a declining year-over-year margin
- Safety: organic sales up single-digit, with declining year-over-year margin
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