Industrial tools, hardware and security products maker Stanley Black & Decker reported its 2021 second quarter financial results on Tuesday, 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 Q2 sales of $4.30 billion, up 36.6 percent year-over-year and up 2.4 percent sequentially from Q1. Organic sales increased 33 percent year-over-year. The 36.6 percent annual gain was powered by 31 percentage points of volume, 5 points from currency and 2 points from price, partially offset 1 point from divestitures.
SBD's gross margin for Q2 was 35.9 percent, up 240 basis points year-over-year and down slightly from 37.3 percent in Q1. Q2 operating margin was 14.9 percent, with adjusted operating margin of 15.5 percent up 270 basis points year-over-year and down from 16.9 percent in Q1. Q2 operating profit of $642 million dwarfed the $281 million SBD had a year earlier and trailed Q1's $711 million, while total Q2 net profit of $460 million nearly doubled from $238 million of a year earlier and trailed Q2's $487 million.
The strong quarter led the company to raise both its full-year revenue and earnings per share outlooks. SBD is now forecasting 2021 full-year organic revenue growth of 16 to 18 percent, a significant increase from the 11 to 13 percent forecasted in the company's Q1 earnings report.
Geographically, SBD's Q2 organic sales improved 23 percent year-over-year in the US; improved 31 percent in Canada; improved 46 percent in Europe; improved 31 percent in Japan; improved 30 percent in Australia; and improved 69 percent in Emerging markets.
By SBD business segment in Q2
- Tools & Storage sales of $3.20 billion jumped 46 percent year-over-year (+48 percent in Q1), with organic sales up 41 percent. In North America, where organic sales improved 30 percent, the company said strong retail performance was supported by robust point-of-sail and growth in commercial and industrial channels. Excluding charges, Tools & Storage segment profit of $644 million soared 73 percent year-over-year at a profit rate of 19.9 percent
- Industrial sales of $602 million grew 16 percent year-over-year (+11 percent in Q1), with organic sales up 14 percent. Engineered Fastening organic growth was up 26 percent (+9 percent in Q1) as strong automotive and general industrial end markets were prgially offset by weaker demand in aerospace and automotive OEM customer production impacts from the global semiconductor shortage. Infrastructure organic sales, meanwhile, fell 11 percent year-over-year (-2 percent in Q1) as 16 percent growth in attachment tools was more than offset by significantly reduced pipeline project activity in oil & gas. Excluding charges, Industrial segment profit of $65 million improved 16 percent year-over-year at a profit rate of 10.9 percent.
- Security sales of $502 million increased 16 percent year-over-year (+2 percent in Q1), with organic sales up 14 percent. In North America, where organic sales grew 16 percent, growth was driven by strong backlog conversion in commercial electronic security and growth within automatic doors & dealthcare. Q2 volume grew 13 percent year-over-year. Security segment profit of $43 million increased 3 percent year-over-year at a profit rate of 8.5 percent.
For the full-year, SBD is now expecting organic growth percentages in the low 20s for Tools & Storage; Low-mid-single digits for Industrial; and high-single digits for Security.
