Stanley Black & Decker Inc SWK reported a fourth-quarter FY23 sales decline of 6% year-on-year to $3.74 billion, missing the consensus of $3.84 billion.
The revenue decline is primarily due to lower outdoor and DIY volume and infrastructure customer destocking. Adjusted EPS of $0.92 beat the consensus of $0.79.
Gross margin expanded by 280 bps to 29.6% sequentially, and adjusted gross margin was 29.8%, up from 19.5% YoY.
Adjusted gross margin expansion was driven by lower inventory destocking costs, supply chain transformation benefits, and lower shipping costs.
Net loss from continuing operations was (7.4%) of sales, down 490 bps YoY. Adjusted EBITDA margin was 9.4%, up 620 bps YoY.
Inventory reduced by ~$1.1 billion versus prior year Q4, driving $1.2 billion of cash from operating activities and $853 million of free cash flow generation in 2023.
Stanley Black & Decker held $449.4 million in cash and equivalents as of December 30, 2023.
2024 Outlook: Stanley Black & Decker expects GAAP EPS of $1.60-$2.85 and Adjusted EPS of $3.50-$4.50 versus consensus of $4.46.
Stanley Black & Decker expects total organic revenue to be relatively flat YoY +/- 2 points, and Adjusted EBITDA margin of ~10%
The company sees a free cash flow of $0.6 billion to $0.8 billion. For Q1, SWK anticipates Adjusted EPS to approximate ~13% of FY Adjusted EPS.
Price Action: SWK shares are trading lower by 2.27% at $91.18 on the last check Thursday.
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