Industrial tools, hardware and tool storage products maker Stanley Black & Decker reported its 2021 fourth quarter and full-year financial results on Feb. 1, showing modest year-over-year sales growth for the company that now consists of two business segments — Tools & Storage and Industrial — after announcing the divestment of its electronic security and healthcare businesses in December.
Following double-digit sales growth for several quarters, SBD's Q4 sales of $4.07 billion grew 1.6 percent year-over-year as price (+5 percent) and acquisitions (+6 percent) were largely offset by lower volume (-8 percent) and currency (-1 percent). The company said volume was impacted by a series of logistical and other supply chain challenges. In Q3, sales of $4.26 billion were up 11 percent year-over-year.
SBD's Q4 gross margin was 28.3 percent. Excluding charges, gross margin of 29.0 percent was down 630 basis points year-over-year, which the company largely attributed to price realization that more than offset commodity inflation, higher supply chain costs and lower volumes. Q4 operating profit was $206 million, down 68.7 percent year-over-year, with margin of 5.1 percent dwarfed by the 16.4 percent of a year earlier.
SBD's Q4 net profit of $329 million was down 28.2 percent year-over-year.
"While we were not satisfied with the fourth quarter volume and cash flow performance driven by the constrained and congested supply chain, we are confident in the steps we have taken and are continuing to take," SBD president and CFO Donald Allan Jr. said, in the company's earnings release. "We exit the year having implemented price increases to mitigate inflationary impacts while improving efficiencies and investing in expanded capacity to support the continued growth we project in 2022 and beyond."
For the full year, SBD's 2021 total sales of $15.62 billion jumped 19.6 percent over 2020, with organic sales up approximately 17 percent. Gross margin of 33.3 percent trailed 2020's 33.7 percent. Operating profit was $1.95 billion on margin of 12.5 percent, compared to $1.78 billion and 13.6 percent in 2020, respectively.
Allan said the company expects to see full-year 2022 revenue growth rate in the mid-20s, with organic sales up 7 to 8 percent vs. 2021.
By SBD business segment (not including electronic security and healthcare, which are now discontinued operations):
- Tools & Storage Q4 sales of $3.37 billion increased approximately 3 percent year-over-year as its recent acquisitions of MTD and Excel added 7 percent points of growth and another 5 points came from price, largely offset by lower volume (-8 points) and currency (-1 point). Organic revenue declined approximately 3 percent. SBD said regional organic growth was strong in emerging markets (+7 percent), with weaker performances in North America (-5 percent) and Europe (-4 percent).
- Pricing actions delivered mid-single digit growth. Q4 segment profit was $235 million on a rate of 7.0 percent, and 11.4 percent excluding charges (vs. 20.5 percent a year earlier).
- Regionally, 69 percent of Q4 sales were in North America; 15 percent were in Europe; 12 percent were in Emerging Markets; and 4 percent were in Other.
- For the full year, sales of $12.82 billion jumped 24.1 percent vs. 2020 (+20 percent organic), while profit of $1.99 billion increased 9.1 percent.
- Industrial Q4 sales of $610 million fell approximately 7 percent year-over-year as price (+3 points) were more than offset by lower volume (-9 points) and currency (-1 point). Organic revenue fell approximately 6 percent. Engineered Fastening organic growth fell 9 percent, as the company noted strong general industrial growth was offset by market-driven aerospace declines and lower automotive OEM production stemming from the global semiconductor shortage. Organic Infrastructure organic revenues grew 3 percent, as 18 percent growth in Attachment Tools was partially offset by significantly lower pipeline project activity in Oil & Gas.
- Q4 segment profit was $54 million on a rate of 8.8 percent, and up 9.3 percent excluding charges (vs. 14.5 percent a year earlier).
- Regionally, 56 percent of Q4 sales were in North America; 18 percent were in Emerging Markets; 16 percent were in Europe; and 10 percent were in Other.
- For the full year, sales of $2.46 billion increased 4.7 percent (+3 percent organic), while profit of $257 million increased 16.3 percent.
"While we continued to navigate an extremely dynamic supply chain and inflationary environment as the year progressed, we are focused on even stronger day-to-day operational execution, inventory management and pricing realization," SBD CEO Jim Loree said. "Most importantly, we are leveraging key investments in product innovation, strategic growth initiatives as well as capacity expansions to better serve our customers who are experiencing unprecedented demand."