Stanley Black & Decker (SWK) shares plummeted 6.67% in pre-market trading on Tuesday following the release of its second-quarter 2025 financial results. The tool manufacturer reported disappointing revenue and lowered its full-year guidance, citing challenges from tariffs and a slow outdoor buying season.
The company's Q2 revenue came in at $3.9 billion, marking a 2% decrease year-over-year and falling short of the $4 billion analysts had expected. Despite the revenue miss, Stanley Black & Decker reported an adjusted earnings per share (EPS) of $1.08, significantly outperforming the IBES estimate of $0.41. The company attributed this earnings beat to cost discipline, pricing measures, and a favorable tax rate.
However, investors seemed more focused on the company's revised outlook for 2025. Stanley Black & Decker now expects a full-year EPS of -$0.65, with an adjusted EPS range of $1.10 to $1.30. The company warned of a substantial impact from tariffs, estimating a gross annualized tariff impact of approximately $800 million. Management expects the timing and costs for tariff mitigation countermeasures to have an EPS impact of about $0.65 in 2025. These factors, combined with ongoing inventory adjustments and a challenging outdoor product market, appear to be driving the negative sentiment in pre-market trading.