Hand tools, power tools and related accessories manufacturer Stanley Black & Decker reported its 2023 fourth quarter and full year financial results on Feb. 1, showing that while total sales had a modest year-over-year decline, overall margins grew — driven by SBD’s Tools & Outdoor segment.

SBD posted total 4Q23 sales of $3.7 billion, down 6% year-over-year as volume (-7%) was narrowly offset by currency (+1%). Organic sales fell 7% year-over-year.

The company’s 4Q23 gross margin was 29.6%, up 10.7 basis points year-over-year. Sequentially, adjusted gross margin of 29.8% jumped 220 bps.

SBD inventory at the end of 4Q23 was $4.7 billion, down about $1.1 billion year-over-year and down about $240 million from the end of 3Q23.

The company’s 4Q23 operating loss was 7.4% of sales, down 490 bps year-over-year. 4Q23 EBITDA was 4.2% of sales, while adjusted EBITDA was 9.4% of sales and up 620 bps.

By SBD business segment in 4Q23:

• Tools & Outdoor sales of $3.154 billion were down 7% year-over-year as volume (-8%) was narrowly offset by currency (+1%). Organic revenue was down 8%. Segment margin was 9.3%, up 920 bps year-over-year.
• Industrial sales of $582 million were down 4% year-over-year as price (+1%) was more than offset by lower volume (-5%) in infrastructure. Engineered fastening organic revenues were up 7%, with double digit growth in aerospace and automotive, partially offset by softness in general industrial fastener markets. Segment margin was 11.2%, down 10 bps year-over-year.

The company noted that its previously-announced $760 million divestiture of its Infrastructure business unit to Epicor AB is set to close at the end of 2024’s first quarter.

Cost Savings

The company updated progress made on its Global Cost Reduction Program that is expected to generate $1.5 billion of pre-tax run-rate cost savings by the end of 2024, growing to $2 billion by the end of 2025. SBD said it was modestly ahead of its savings target for full-year 2023 and achieved $835 million of savings from lower headcount, indirect spend reductions and supply chain transformation.

Since inception in mid-2022, the program has generated over $1 billion in pre-tax run-rate savings and the company has reduced inventory by $1.9 billion, according to SBD.