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July 30, 2020

Stanley to permanently layoff 1,000, reverse temporary furloughs for about 9K

Photo | Robert Benson Photography Stanley Black & Decker's New Britain headquarters.
By Sean Teehan

Stanley Black & Decker will permanently layoff about 1,000 employees, while reversing temporary furloughs and hour reductions for about 9,000 other workers.

Jim Loree, president and CEO of the New Britain-based toolmaker, announced the actions in a Thursday morning call with investors, during which he reported Stanley's second-quarter profits dropped 33%.

During the call, Loree projected optimism, touting progress on a $1-billion cost-savings initiative and strong trends in retail tool sales, which could be connected with the recent phenomenon of home-bound people working on Do-It-Yourself home improvement projects. Loree also noted growth in retail sales and opportunity in ecommerce.

"We feel very positive about what our team has accomplished, and how the company is positioned to deal with both the opportunities and the challenges ahead," Loree said.

Stanley's profits dipped in the second quarter to just under $239 million, or $1.52 per diluted share. That's down 33% from the same period last year, when the company took in about $357 million, or $2.37 per diluted share. However, the decline in profits was less than the 45% second-quarter drop Loree predicted in an April earnings call.

Its net sales during the quarter fell by 16% to about $3.8 billion.

CFO Don Allan said on Thursday that Stanley's tools and storage business was down 16% in second-quarter revenues, but he noted "point of sale" (POS) sales -- sales from physical retail stores -- grew by upwards of 50% for parts of the three-month period.

"While we do not know the duration of this [home DIY] trend, we can report the strong POS [sales] continued into the first four weeks of July," Allan said.

Photo | HBJ File
Stanley Black & Decker CEO James Loree.

Ecommerce represented about 15% of revenue in Stanley's tools and storage unit, which Loree said is impressive since ecommerce represented about 10% of that segment's revenue before the pandemic, and it took the company about a decade to get it that high.

Stanley's security segment performed better than expected, but sales still dropped 11%, Allan said. But Loree pointed out that increased demand for health and safety products gels with the company's push to expedite the commercialization of products like touchless doors and thermometers, although the company has temporarily suspended in-house research and development.

During the call, Loree also noted Stanley's formation of a committee on racial justice for employees, which has made several recommendations on how to better support Black workers. 

The trend toward remote working foisted upon companies by the pandemic will likely continue at Stanley after COVID-19 has largely passed, Loree said, since the company has seen some unexpected benefits from the work-from-home arrangement.

"It has allowed us to virtually flatten the organization, incorporating more diverse perspectives into decision making, and enabling faster and more efficient collaboration," Loree said, noting it will also allow Stanley to reduce its office real estate footprint. "As we move forward we will continue to have offices as activity hubs, however there will be many associates who will continue to work remotely by choice."

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