Stanley Black & Decker raises prices on tariff concerns, will move more production to Mexico
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Stanley Black & Decker's New Britain headquarters.
Stanley Black & Decker has raised its prices to account for the impact of tariffs, and says another price hike is on the way.
The New Britain-based toolmaker is also continuing to move production to avoid the worst of the effects of the Trump administration’s trade policy.
Stanley on Wednesday announced first quarter revenue and profits that exceeded Wall Street’s expectations, but has cut its annual profit forecast on tariff concerns.
“In light of the current environment, we are accelerating adjustments to our supply chain and exploring all options as we seek to minimize the impact of tariffs on end users while balancing the need to protect our business and our ability to innovate for years to come,” CEO Donald Allan Jr. said.
The company implemented an initial price increase in April and has notified its customers that “further price action is required.”
Stanley is continuing to move some of its manufacturing out of China, and says it will increase production in Mexico, but executives stressed that this could take up to two years to finalize.
“Supply chain adjustments require time to implement,” Chief Operating Officer Christopher Nelson said on a conference call with analysts. “Pricing actions are the quickest countermeasure at our disposal.”
The April price increase was described as being in the high single digits. A second price increase is expected at the beginning of the third quarter.
“We are also continuing to closely monitor shifting tariff policies as well as their potential effects on the operating and demand environments with an aim of being agile and responsive,” Allan said.
Stanley’s first quarter revenues of $3.7 billion were down 3% on the same quarter last year. Adjusted earnings per share came in at 75 cents, beating analysts’ forecasts of 66 cents.
The company now expects adjusted profit for the full year of about $4.50 per share, compared to its previous forecast of $5.25, which had excluded any impact from tariffs.
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