Industrial tools, hardware and security products maker Stanley Black & Decker reported its 2021 first quarter financial results on Wednesday, showing continued major year-over-year growth powered largely by the company's Tools & Storage business unit.
The New Britain, CT-based company posted total Q1 sales of $4.2 billion, up 34.1 percent year-over-year and down 4.8 percent sequentially from Q4 2020. Volume represented 29 percentage points of the year-over-year growth, while the company saw organic sales growth of 31 percent.
SBD's Q1 gross margin was 37.3 percent, up 460 basis points from a year earlier. Q1 operating profit of $711 million on margin of 16.9 percent dwarfed the $275 million and 8.8 percent from a year earlier and improved sequentially from $686 million and 15.6 percent in Q4, respectively.
SBD had a total Q1 profit of $487 million, up from $467 million in Q4 and far more than the $133 million of a year earlier.
In its Q1 earnings presentation, the company noted that a significant portion of its portfolio is positioned for a market rebound, with Tools and Storage, Industrial and Security all set to benefit from a potential global infrastructure boom coming out of the COVID-19 pandemic.
"As we look to the future, our portfolio is uniquely positioned to benefit from key trends, several of which have been accelerated and amplified by the pandemic: the consumer reconnection with the home and garden, e-commerce, electrification and health and safety," said James Loree, SBD CEO. "We are capitalizing on this opportunity by funding innovation, commercial and capacity investments to support continued organic growth and share gains."
The strong quarter led the company to raise both its full-year revenue and earnings per share outlooks.
Geographically, SBD's Q1 organic sales improved 28 percent year-over-year in the US; improved 38 percent in Canada; improved 27 percent in Europe; improved 37 percent in Japan; improved 37 percent in Australia; and improved 52 percent in Emerging Markets.
By business segment in Q1:
- Tools & Storage sales of $3.06 billion jumped 48 percent year-over-year, powered by a 42-point gain in volume. The company said a 41-point organic gain in North America was driven by robust performance in retail and a surge in the commercial and industrial channels. Excluding charges, segment profit rate of 21.4 percent ($651 million)was up 990 basis points year-over-year.
- Industrial sales of $658 million grew 11 percent year-over-year, powered by a 6-point gain in volume. Engineered Fastening organic growth was up 9 percent as double-digit automotive and general industrial growth were driven by market rebounds that were partially offset by lower volume in aerospace. Infrastructure organic revenues were down 2 percent, as 16 percent growth in Attachment Tools were offset by significantly reduced pipeline activity in oil & gas. Excluding charges, segment profit rate of 15.9 percent ($101 million) was up 270 basis points year-over-year.
- Security sales of $477 million grew 2 percent year-over-year, driven by a 4-point gain from currency, 1-point gain from price and 1-point gain from acquisitions, partially offset by a 4-point loss from divestitures. North America was flat organically. Excluding charges, segment profit rate of 8.5 percent ($35 million) was up 110 basis points year-over-year.
SBD said it is now forecasting full-year 2021 organic revenue growth of 11 to 13 percent — far above the 4 to 8 percent growth the company forecasted in its Q4 2020 earnings report. For Q2, the company is expecting organic revenue growth of 28 to 32 percent year-over-year, including 35 to 40 percent in Tools and Storage, mid- to high-teens in Industrial, and low double digits in Security.
"We have raised guidance to reflect the exceptional start to the year and improved demand outlook across most of our businesses," said Donald Allan, SBD president and CFO. "We continue to prepare the company's operations for a second half which could be much stronger than our current guidance, so we are prepared to maximize our performance if market conditions continue to be very strong into the second half."