Manufacturing company Stanley Black & Decker (NYSE: SWK) announced better-than-expected revenue in Q1 CY2026, with sales up 2.7% year on year to $3.85 billion. Its non-GAAP profit of $0.80 per share was 34.6% above analysts’ consensus estimates.

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Chris Nelson, Stanley Black & Decker's President & CEO, commented, "Stanley Black & Decker entered 2026 with unwavering commitment to our strategic priorities, and we delivered stronger than planned first quarter results through disciplined execution. Our team's focus and resilience ensured that sales, gross margin, and cash1 performance remain firmly on track with our full year plan. I am proud of our team for maintaining their customer-centric approach and for advancing our vision to build a world-class branded industrial company.

Company Overview

With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Stanley Black & Decker’s 1.7% annualized revenue growth over the last five years was sluggish. This fell short of our benchmarks and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Stanley Black & Decker’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.6% annually.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Stanley Black & Decker’s organic revenue was flat. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Stanley Black & Decker reported modest year-on-year revenue growth of 2.7% but beat Wall Street’s estimates by 2.7%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Stanley Black & Decker was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.8% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, Stanley Black & Decker’s operating margin decreased by 2.2 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Stanley Black & Decker’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Stanley Black & Decker generated an operating margin profit margin of 4.2%, down 2.6 percentage points year on year. Since Stanley Black & Decker’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Stanley Black & Decker, its EPS declined by 15.4% annually over the last five years while its revenue grew by 1.7%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Stanley Black & Decker’s earnings to better understand the drivers of its performance. As we mentioned earlier, Stanley Black & Decker’s operating margin declined by 2.2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Stanley Black & Decker, its two-year annual EPS growth of 39.7% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q1, Stanley Black & Decker reported adjusted EPS of $0.80, up from $0.75 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Stanley Black & Decker’s full-year EPS of $4.72 to grow 15.7%.

Key Takeaways from Stanley Black & Decker’s Q1 Results

It was good to see Stanley Black & Decker beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Overall, this print was pretty good. The stock remained flat at $78.94 immediately following the results.

Is Stanley Black & Decker an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).