Stanley Black & Decker (SBD) reported second-quarter net sales of $4 billion, flat from a year earlier but up 3% organically as higher volumes offset portfolio changes.

Volume increased 3% and foreign currency added 1%, while pricing was flat. The divestiture of Consolidated Aerospace Manufacturing (CAM) and SBD’s shift to a licensing model for gas-powered walk-behind outdoor equipment reduced reported growth by a combined 3%.

Gross margin rose 600 basis points to 33.0%, while adjusted gross margin increased 620 basis points to 33.7%. Net tariff refunds contributed about 250 basis points to both measures.

“The Stanley Black & Decker team is committed to executing our strategy and delivering profitable, organic growth,” President and CEO Chris Nelson said.

Tools & Outdoor sales increased 3% to $3.56 billion, with organic revenue also up 3%. Power tools organic sales jumped 8%, while hand tools, accessories and storage rose 2% and outdoor products fell 7%.

North America organic sales increased 4%, compared with a 2% decline in Europe and 3% growth in the rest of the world. SBD attributed the segment’s gain primarily to power tools strength in U.S. retail and continued professional demand in its U.S. commercial and industrial channel.

Tools & Outdoor adjusted segment margin expanded 380 basis points to 11.8%, driven by productivity gains and favorable product mix, with tariff refunds adding about 150 basis points.

Engineered Fastening sales fell 18% to $396 million due to the CAM divestiture, but organic revenue increased 3%. Industrial organic sales rose 7% and automotive gained 2%. Adjusted segment margin improved 220 basis points to 13.0%.

SBD raised its 2026 outlook, including increasing its free cash flow forecast to $600 million-$800 million from $500 million-$700 million. It continues to expect approximately flat total sales and low-single-digit organic growth.

MDM Analysis

For distributors, SBD’s results point to selective strengthening in industrial and professional tool demand rather than a broad market acceleration. Volume-led growth, an 8% power tools increase and continued U.S. commercial and industrial demand are constructive indicators, while 7% industrial fastening growth suggests improving activity across factory end markets.

Still, pricing was flat, European demand contracted and outdoor products remained weak. The sharp margin expansion also overstates the underlying improvement because tariff refunds supplied a substantial portion. SBD’s low-single-digit organic growth outlook implies steady, not surging, restocking conditions.

Distributors should expect the best momentum in professional power tools and industrial fastening, while staying alert for future price actions as input inflation rises for battery metals, tungsten and oil derivatives.