Stanley Black & Decker (NYSE: SWK) reported Q2 EPS of $3.08, $0.23 better than the analyst estimate of $2.85. Revenue for the quarter came in at $4.3 billion versus the consensus estimate of $4.2 billion.

GUIDANCE:

Stanley Black & Decker sees 2021 EPS of $11.35-$11.65, versus the consensus of $11.19.

• Management is raising its 2021 EPS outlook to $10.80 - $11.20 from $10.15 - $10.55 on a GAAP basis, and to $11.35 - $11.65 from $10.70 - $11.00 on an adjusted basis. The Company is also reiterating that free cash flow is expected to approximate net income. The primary factors for the increased EPS guidance include stronger organic growth and incremental pricing actions, which are expected to be partially offset by higher expedited transit costs in Tools & Storage and an increase in commodity inflation. Management will discuss its 2021 planning assumptions in more detail on today's earnings call.
• Donald Allan Jr., President and CFO, commented, "We delivered outstanding financial performance in the first half with strong momentum across each of our businesses. Tools & Storage posted 43% organic growth while Industrial and Security both achieved high single digit organic growth. We leveraged our margin resiliency efforts to deliver 510 basis points of operating margin expansion, record adjusted earnings per share and strong free cash flow generation.
• "Our revised 2021 guidance calls for organic revenue growth of 16% - 18% and, at the midpoint, adjusted EPS expansion of 27% versus prior year and 37% versus 2019. The updated outlook reflects our strong first half performance as well as improved visibility to demand in Tools & Storage. We continue to make investments to support our growth catalysts, increase capacity in our supply chain and drive our margin resiliency initiatives.
• "The organization remains focused on day-to-day execution, implementing price increases and margin resiliency programs in response to commodity inflation, and operating in accordance with our SBD Operating Model. We believe the Company is well-positioned to deliver above-market organic growth with operating leverage, strong free cash flow generation and top-quartile shareholder returns over the long-term."
• The difference between 2021 GAAP and adjusted EPS guidance is $0.45 - $0.55, consisting of acquisition-related and other charges. These forecasted charges primarily relate to facility moves, deal and integration costs and functional transformation initiatives.

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