SWK · Q2 2026 Earnings

Cautious

Stanley Black & Decker

Reported July 29, 2026

30-second summary

Q2 revenue of $3.96B beat consensus by 0.3% and grew 0.4% YoY, while adjusted EPS of $1.57 beat the $1.20 Street by 30.8% and came in ahead of prior management commentary. Free cash flow of $698M in the quarter effectively covers the $447M Q1 outflow and sets up a materially better H1 posture than a year ago. The notable absence is a guidance refresh — with no transcript available and the press release silent on updated FY2026 EPS or revenue ranges, the credibility test on the H2 gross margin walk and the Q4 exit is deferred rather than resolved.

Headline numbers

EPS

Q2 FY2026

$1.57

Revenue

Q2 FY2026

$3.96B

+0.4% YoY

+0.3% vs est.

Gross margin

Q2 FY2026

33.0%

Free cash flow

Q2 FY2026

$0.70B

Operating margin

Q2 FY2026

14.1%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$3.96B	$3.95B	+0.4%	$3.85B	+3.0%
EPS	$1.57	$1.08	+45.4%	$0.80	+96.3%
Gross margin	33.0%	27.0%	+600bps	30.1%	+290bps
Operating margin	14.1%	2.7%	+1140bps	4.2%	+990bps
Free cash flow	$0.70B	$0.13B	+418.3%	$-0.45B	+256.1%

Guidance

No quantitative guidance provided in either prior or current quarter; comparison cannot be performed.

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Tools & Outdoor	$3.564B	$3.461B	+3.0%
Engineered Fastening	$0.396B	$0.484B	-18.1%
Tools & Outdoor Organic Growth	3%	—	—
Engineered Fastening Organic Growth	3%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Tools & Outdoor Segment Profit Margin	10.9%	—	—
Engineered Fastening Segment Profit Margin	13.0%	—	—
Adjusted EBITDA Margin	11.3%	8.1%	—
Free Cash Flow	$698.2M	—	—

Management tone

No earnings call transcript was available for this quarter; tone analysis is deferred. The narrative arc through the prior four quarters — Q3 2025 Nelson anchors 2026 on margin without volume help → Q4 2025 formal FY2026 guide + FCF credibility cleared → Q1 2026 H1→H2 bridge quantified and $500M buyback authorized → Q2 2026 execution proof on the margin and cash bar — remains intact based on the press-release numbers, but management's forward posture and any qualitative shift on 2027 setup, pricing, or the buyback pace cannot be assessed from the press release alone.

Answers to last quarter's watch list

Q2 adj gross margin print — Adjusted gross margin printed 33.7%, up 620bps YoY versus Q2 2025's 27.5% adjusted. This is the strongest quarterly AGM print of the transformation cycle and materially de-risks the H2 walk.

Resolved positively

Q2 organic revenue vs. the LSD growth guide — Both segments printed +3% organic, with T&O crossing zero from Q1's -1% (and Q4 2025's -4%). The elasticity normalization and lap of prior-year promotional disruption that Nelson and Mitchell debated on the Q1 call materialized.

Resolved positively

CAM close confirmation and Q2 segment reporting — Engineered Fastening reported revenue of $396M is down 18% YoY, consistent with CAM removal. YTD 2026 included $117M of CAM revenue and $22M of CAM segment profit; Q2 excluded CAM entirely. GAAP EPS of $2.33 versus adjusted $1.57 reflects the CAM gain on sale flowing through GAAP earnings in Q2. Status: Resolved positively on execution.

Tariff regime stability and IEPA→301 transition — The company didn't disclose specific tariff-line updates in the press release; transcript required to confirm the August 301 reinstatement landed at IEPA-equivalent levels. The 620bps AGM YoY expansion suggests tariff mitigation is running ahead of or at plan.

Continue monitoring

Back-half pricing adjustments — Not addressed in the press release.

Continue monitoring

Stanley brand growth inflection by mid-year 2026 — Not disclosed in the press release. T&O organic +3% is directionally consistent with brand catalysts contributing, but Stanley-specific POS data wasn't called out on the print.

Continue monitoring

$500M buyback pace and net leverage glide to 2.5x by year-end — Cash flow statement shows $252M of treasury purchases in Q2 plus a $125M cash settlement on a forward stock purchase contract; leverage not disclosed in the press release excerpt.

Continue monitoring

FCF cadence — Q2 generation needs to start covering YTD outflow — Q2 FCF of $698M more than covers Q1's outflow, putting H1 2026 FCF at +$251M versus H1 2025's -$350M. This is a materially better setup than a year ago.

Resolved positively

What to watch into next quarter

Q3 2026 adjusted gross margin trajectory — with Q2 at 33.7% adjusted, whether the productivity and fixed-cost bridge delivers further sequential expansion or plateaus will shape the Q4 exit conversation.

Formal FY2026 guidance disposition — the press release did not update the FY EPS range despite the Q2 beat. Watch whether Q3 brings a raise, a reaffirmation with a narrowed range, or a deferral to the Q4 print — each carries different signal.

T&O organic sustaining at +3% or accelerating — the inflection landed; the question is whether it holds as the H2 comp gets harder and the Craftsman NPD cycle approaches its late-2026 launch window.

Buyback deployment pace through Q3 — Q2 saw $252M of treasury purchases plus a $125M forward settlement; watch pace against the year-end leverage target.

Any Stanley brand growth commentary on the Q3 call — Nelson anchored the mid-2026 inflection last quarter; Q3 is the first reporting window past that date.

2027 setup framing — watch whether management begins to shape 2027 as a revenue-growth year rather than a margin-continuation year.

Sources

Stanley Black & Decker Q2 FY2026 press release and supplemental financial materials (Exhibit 99.2), filed July 29, 2026.
Q1 FY2026, Q4 FY2025, Q3 FY2025, and Q2 FY2025 Tapebrief briefs — for prior-quarter context and watch list resolution.

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