Stanley Black & Decker Posts Q4 Loss as U.S. Housing Market Freeze Takes Toll

Stanley Black & Decker, a prominent tool maker based in New Britain, Conn., reported a fourth-quarter loss of $304.4 million, or $2.03 per share. This is a significant increase compared to the loss of $45 million, or 35 cents per share, during the same period the year before.

However, the company highlighted that its supply-chain adjustments helped bolster margins, providing some positivity amidst the challenging market conditions. Adjusted earnings for the quarter stood at 92 cents per share, surpassing the forecast of 79 cents per share by analysts surveyed by FactSet.

The dip in fourth-quarter sales was also notable, experiencing a 5.6% decline to $3.74 billion. This figure fell short of the average analyst estimate of $3.84 billion. The decrease can be attributed to reduced demand for outdoor machinery such as leaf blowers, weaker sales in the do-it-yourself category, and inventory drawdowns by infrastructure customers.

One of the key factors impacting the housing market and subsequently affecting sales was the surge in mortgage rates in 2023 due to Federal Reserve policy. This led to a slowdown in home sales across much of the U.S., resulting in decreased demand for home-improvement projects undertaken by new homeowners and those looking to sell their homes.

Looking ahead to 2024, Stanley Black & Decker aims to achieve a net income ranging from $1.60 to $2.85 per share. Excluding certain one-time items, the company projects adjusted earnings within a range of $3.50 to $4.50 per share.

President and Chief Executive Donald Allan expressed confidence in the company's plan for the year, citing improvements in the supply-chain costs that are within their control. These improvements are expected to contribute to earnings growth and strong cash generation.