Stanley Black & Decker (SWK) 2 May 242024 Q1 Earnings call transcript

Welcome to the First Quarter 2024 Stanley Black & Decker Earnings Conference Call. My name is Shannon, and I will be your operator for today's call.

[Operator Instructions]

Please note that this conference is being recorded. I will now turn the call over to the Vice President of Investor Relations, Dennis Lange. Mr. begin. may you Lange,

Good Black and Quarter & Shannon. us Webcast. for for Stanley Decker's morning, you, thanks everyone, joining Thank XXXX First

and & Outdoor; Here Don Pat Hallinan, COO, to addition CFO. and and CEO; and President EVP Tools today, Nelson, and of myself President EVP Chris in Allan, is

of current based they the involve call now Allan. may today. uncertainty. CEO, not accurate, from results such, make based as the that and we statements events differ will filing. I'll of was to will earlier of XXXX morning therefore forward-looking are possible caller. filed will and It's statements we normally Consistent refer on prove any to be statements review IR section with and materially the may call and just on to results are be cautionary earnings at views. Such today. This to, Pat the President direct supplemental on session. followed presentation, Our statements XX might available And as webcast risks making over during issued morning, we release, a webcast, that future our with actual Don website. assumptions be our this per going A and the matters our X-K our various release turn We available that recent question are we other prior beginning Don, replay Q&A and Act do, be our quarter and which also most 'XX you press will forward-looking this morning's which we a some by in to a.m. the Chris with sticking we that in our first one

Thank you, everyone. Dennis, good morning, and

consistent, and objectives. Our solid performance are progress against of operational result first we key making execution, was the quarter

of creation is opportunities this our on the significant see strategic execution company entire tied disciplined focused transformation and We the continue to strategy. to value business

We organization. free that primary is building margin are the emphasis momentum are flow encouraged cash and across our gross of of Two generation by the areas expansion.

within environment pleased behind on We macro considering is worse at our is in our significantly XXXX the corresponding negative This expectations of mid-XXXX. 'XX performance our are a revenue particularly versus what transformation control the focused and with notable and gross momentum and our margin. in initial outset are

$X remains reduction rate global Our of on the savings for the XXXX. end by program billion run And cost of billion expected track end of $X.X by XXXX.

quantifiable our hit we point delivering the decisive are halfway As actions results. of journey, our

run date. XXXX, captured we our this rate of to with guidance. billion gross confident savings We XX% Specifically, program have in $X.X remain support will consistent margins

ahead approximately margins gross expected We the adjusted lines initial or these XX% exit months. in over to product company's this are of and year of carry encouraged gross at excess improve believe margin revenue expectations. We XX XX that to continue will XXXX current to XX% their the of next is adjusted upon profile

XX%, As it cyclically-depressed portfolio our rest fastener the and which outdoor the that is aerospace of or relates to the business business. rapidly-recovering predominantly

the efficiencies continues cost as cost to significant drive demand response the base product aerospace to necessary to significant leverage actioning of make plane in line outdoor recover. current fastener are We to improvements wide-body growth refining production the profitability and market to

share driven to share position market Our We stable coupled increasing. with in long-term gains. be consistent now profitability, tools success improved is will by our believe

our tools XXXX Professional was iconic the led across in performed our by centers, brand. point-of-sale category North data example, For average home DEWALT American the than which better

this Retailers better serving across performance. also our are We activity delivering improved for brands. are rates, fill by earning customers more right the recognizing our

the on organization. Vendor It's we indication right as team's This their efforts Award. Congratulations are Black and partners testament as and recognized early Decker with & Hardware named the our Performance work partners. to that our to Grainger Ace get to the Year closer CRAFTSMAN and XXXX, to track. an For of is we Stanley a

are As I root. deliver to confident the our how we our am we levels and by shareholder that high cash long-term growth, report first executing positioning strategy, quarter organic efforts our are are energized we strong taking profitability, revenue company performance, by to drive of flow transformation return.

first the to Turning results. quarter

organic line of showed top point. signs a Our with stabilization revenues down

and and now infrastructure Engineered as DEWALT revenue by Fastening Excluding muted organic divested was the was flat consumer the DIY offset growth business, demand.

of per was growth of Adjusted year destocking earnings margin by were basis XXX points XX%, reduced supply basis costs, benefits supported $X.XX. first the gross the chain and up last shipping transformation costs. expansion XXXX. half versus margin gross both and share lower quarter diluted was Adjusted Adjusted EPS above second inventory XX points and

We $X.XX, flow April this of X, $XXX cash Epiroc. reiterating we completed later to presentation. On year our range of adjusted our are provide as $XXX diluted EPS XXXX on our in Pat the million. Stanley more up guidance Infrastructure color full will sale well as $X.XX expected free of to million

We proceeds our have to debt, deployed balance our strengthening net already commitment demonstrating the sheet. short-term transaction reduce to further from

have business review to contributions focus we Nelson our continue and our want pass for transformation their team and energy demand the to charge cash growth performance. Looking we persist margins, same our across in market time, driving that journey to long-term earnings to I members generate and to around fuel to and now forward. I trends the investments At gains are the improvements forward and targeted growth as are segment chain Chris supply XXXX, their businesses. our flow. made deliver to businesses. we designed for expand we progress share on strong will funding we to across thank cost expect mixed it world the

were Beginning our was approximately year, to you, first segment quarter, muted in reductions, was expectations. basis Don, down in and share investments improvement pressured achieved with with consistent partially morning, margin consumer was which and as This in DIY Tools revenue with first prior targeted good everyone. which to by of quarter through savings Outdoor, XXXX. X% compared supply offset First chain and organic than Thank was costs, was inventory growth relatively point destocking Adjusted billion, gain flat, offset X.X% DEWALT accelerate & more volume. Pricing shipping the organically demand, lower growth. XXX the versus a designed cost quarter $X.X transformation

Now the pro-driven turning to was product led into international and by Tools growth sales. lines. point one organically Power DEWALT up

equipment cordless, also are DIY revenue demand by hand from X% DEWALT grew We demand. Outdoor revenue seeing for the to listings. X% lower driven power for incremental strong retail product cordless handheld product declined levels line high-margin return quarter, pressured in benefits promotional historic by a on tools Organic and organic outdoor

encouraged showed prior the early retail year. which data, U.S. by start are point-of-sale We to an season versus

We optimistic the are can last years. X than better demand that cautiously be

through the as we U.S. independent quarter. the hit dealer second quarter improve which holidays. The Our pressured and continues to channel shipments inventory, key on-hand visibility will significant in work move through

this POS We stronger and that monitoring they can season during in trends set inventory up are channel XXXX. expect a their clear XXXX currently to the

the As volume market outdoor levels. versus XXXX remains Don soft alluded earlier,

continuing standing to structure. are We not are optimize by still speed and to moving improve cost our with profitability

focus such power our the most growth targeted our Consistent in gain intent as and is segments overall equipment. capturing strategy, profitable attractive to opportunities resources handheld towards with electric share outdoor

declines In America region. Nordics by Germany overall down down performance U.K. the Europe, Outdoor X% X% revenue as France in by offset & were consistent in was with driven organically, was and organic factors partially North by growth Tools and to segment. Turning the the

Brazil, were in other targeted the share. regions our to the market with and We successfully In to making in activate quarter, professional profitability Pro, customers we Latin all capture and and winning expand Outdoor, investments Mexico, quarter. In are innovations aggregate, offerings the for growth while the organically Caribbean America, driven with the these making up Central are led mid-teens in region this Tools performance America product summary, improvements. in by winning the & focused X% on acutely for

with the on We are mixed areas strength. the to of market navigating capitalize goal conditions

are segment deliberate to will opportunities growth in margin activation, We contribute Industrial capture innovation to discuss brands, and will our investments shareholder performance. our long-term now that the returns. I making market and

X% declines year. a revenue First of realization than Price across volume infrastructure more of the and was currency quarter segment pressure. X% last growth offset by Engineered and volume industrial declined Fastening point versus

segment, improve This prior of partially X%. We by was XX% and as execution in a Industrial strong was cost in growth fastening. Industrials This market adjusted decline offset the result by we team gains, basis an growth our share customer of industrial faced. auto quarter EV realization are points considering production was to like I'd Industrial margin improvement delivering productivity. business of behalf around taken automotive. outpacing focused XX.X%, the a price associates. revenue to leadership Fastening world infrastructure year, solid and the growth organic performance believe driven actions year. levels by general aerospace softness volume The quarter and colleagues team, Within particularly was targeted to growth that of segment XXX a the of includes results versus the of strong another for X% a entire the start of our On Engineered thank of result

sync The enhanced slide. is a job I like our flush traditionally Pro to to to we shots. DEWALT MAX in used to first are power a XR also like results rapid introductions, new a horsepower It transition now prime turning our a cordless of into plunge is few framing allow in and of the performs would world's is site. designed by help example the is It X.XX cordless cordless provides innovation. recent midsized when productivity a introducing between peak sub XXV mode, product Now router consistently how of framing sequential time cordless LVL to the next pneumatic investments MAX router. the are which with highlight DEWALT DEWALT material the for users and tool, eliminated to convenience ramp-up tools. corded user of engineered nailer XXV that served dedicated our continue applications nails end

a ToughSystem commercial available storage customizable that a job for sites. workstation portable the top with our maximize is industry's X.X delivers first workstation solution else all-in-one XX-inch This functional DXL their storage that platform construction anything unlike helps work mobile productivity. and is pros Additionally, currently

of investments will and just productive. innovations, in on few innovation continue We manner that believe more our stimulate the a how users these intent activation a our examples gains. These are market centered our making with engine of we brand in share professional coupled the with driving is

you, the our the people pass DEWALT As CRAFTSMAN and world Stanley. Thank celebrate like to on the Hallinan. serving Pat the XXX-year brands responsibility DEWALT, we now with also over to anniversary, and we commitment I'll trades call and around reflect

morning. and Chris, good Thanks,

program since to quarter. cost rate run We savings the progress savings $X.X our transformation aggregate I would slide. inception. bringing the along next in the million achieved in the journey to to our approximately pretax made $XXX billion we've Turning like first highlight approximately period,

business are focus our we our actively operations, and prioritizing cost our identifying our opportunities As our portfolio, optimize streamline teams and structure structure. further transform to

to refine the Given dynamic plans we environment, to and macro savings. deliver targeted continue mobilize

to are confident those in ability We execute our plans.

continue XXXX. the end $X.X end the billion We of to run savings pretax target cost run by pretax rate XXXX rate $X and savings billion by of of

to Strategic the remains to sourcing contributor our date. transformation savings largest

savings such leveraging across as are indirect components, materials of and the expenditures. areas spend on We $X and billion addressable goods finished

Our operations lean distribution improvements. production principles scope and effectiveness facilities. which improves productivity manufacturing The excellence program, stream work within of is leverages our efficiency this driving and

the transformation. is gains platforming, which throughout deliver Footprint-related will event-driven, robust and are to more efficiency XXXX projects product lined increasingly our and with projects remainder become of pipeline up important initiatives beyond. of A in

We our XXXX excellence and to endeavor well to XXXX exit these previously are to we This or centers our and of of leverage distribution XXXX. The our transform we production, have manufacturing closure we sites multiyear optimizing footprint network is in number globe in operations. near ceased announced sites future. optimize facilities as to plan exit redesigning and as manufacturing the during accelerating across a expect for the as

identifies billion support greater, value across $X.X platforming, continue footprint complete product adjusted generating execute aggregate, which initiative first standardized or scale. In procurement year our goal core XXXX, cost unlock quarter, components structure improves complexity which parts we in remain generate changes the regarding efficiency various during sites savings margins that for complexity improving enabling manufacturing chain to and supply to business. our transformation to these can growth a value reducing are in chain. by transformation can growth investments. sustainable be margin return will initiative We our our investments confident approximately our initiatives needed the and this affected while targeted that expected savings and to to product with This eliminates across site X the resources additional this gross and of modifications XX% family,

slide. Moving to the next

expansion value prioritizing We continue support and free generation growth margin long-term flow creation. and to gross cash

quarter seasonal in account with due typical historical receivable line trends free cash increases. was First outflow to

XXXX. profitability the proceeds used net the balance approximately not a target close, balance inventory contained XX the working beginning and moving million, now focused sheet. We occurred improvement to long-term quarter the to in approximately is quarter quarter, in in generate XXX This commercial $XXX days. We roughly of free year reduce on days, is the we've our sale reflected of control first from working our of first to cash quarter remain XXX of Days Because million build strong subsequent year. the $XXX to the where the approximately toward the XXX capital versus increase it infrastructure of paper quarter. prior in to days flow traditionally averaged and second optimization our an improvement inventory the this capital first

footprint-related $XXX full year $XXX our million, to capital full by range CapEx expected our earlier free plan support which the to year items, flow unchanged continue includes transformation we million, range which to year. million million communicated to million reduce of to $XXX organic from is initiatives. XXXX, $XXX is the support combined inventory million $XXX guidance efficiency. prioritizing as for For the $XXX we cash in generation, with working between These cash

further our Our value organic commitment growth dividends sheet. capital long-standing consistent. deployment funding strengthening priorities Investing shareholders our return in our through cash remain balance and and to to transformation,

costs, in improved basis quarter XXX profitability. the lower destocking and prior chain by year, shipping Adjusted of first margin driven points versus inventory XX% transformation to supply gross costs. benefits lower Turning

are year. sequentially adjusted company margin We each for increase we adjusted expect to gross full in approximate the and total margin planning gross of XX% half to XXXX, for

the XXs. margin an to low adjusted in the We expect gross to year continue exit at rate

incremental and in long-term are hard accelerate growth. to off We allows revenue organic XXXX done we've solid investments to progress start us the adjusted fund margin to make a work gross to

to turning the key Now the assumptions. guidance XXXX remaining and

just reiterating earnings In addition range range to covered, we I of GAAP to to the free and an $X.XX. guidance $X.XX $X.XX of adjusted share per $X.XX cash flow earnings share per are

the this midpoint the or adjusted to to maintaining the of We for assumptions range plus through We we revenue revenue single expect be flat are down range low organic believe X%. controls. to be minus likely most outcome digits. EPS At level, organic our to cost achieve is of

modest incorporates markets, aggregate view our remain gaining headwinds share Our we and in on for focused in this environment.

funding a maintaining to cost remain for to approach growth. We are disciplined management and organic committed long-term investments

divestiture is impact expected full to the revenue impact organic first will company. segments. now the to or minus single Industrial plus revenue is to revenue the & report to flat total likely be consistent flat Turning segment's most year be positive. Infrastructure's organic below digits, low relatively Outdoor organic growth. quarter The slightly with segment quarterly. Tools decline is And expected the that deal we the will closed,

is planning innovation, activation designed CRAFTSMAN brands. This $XXX as to an in DEWALT, support the market of million full are mid-XX% approximately sales XXXX to for Stanley assumption a our result the in SG&A year. Our incremental powerful in accelerate for XXXX. growth zone These percentage should and and investments

will remain the of We of the our with swing should in agile or outlook demand favor. out investments pace

profitability. to Turning

the slightly the year be Engineered divestiture. strategic in the flat positive dilution year, transformation is offset momentum Fastening XX% by benefits also Outdoor infrastructure operating Segment year-over-year, company The be as total is approximate in to versus business expect our program. Tools from Industrial margin & to is margin from transformation. driven of adjusted by the margin to by expected full for up supported We continued EBITDA the prior segment planned ongoing to improvement

manage range position with Our for the optimize work gross hard remains while variability the being adjusted will SG&A demand largest EPS in $X, business macro and balance thoughtfully growth. to investments to adjusted year preserve market the the working throughout to longer-term we uncertainty, to contributor, margin

of of elements program, guidance. largely adjustments being to from expenses noncash non-GAAP million $XXX these costs. ranging to the other million, approximately include transformation earnings supply XX% footprint to pretax Turning with $XXX chain GAAP rationalization relating

Our items XXXX Discrete rate full for tax to with in on assumptions second the to year expected adjusted third modeling. the primarily planning rate slide the impact are to expected the and and guidance tax be XXs. XX% at fourth the reduce XXXX, quarters is low midpoint noted are with quarter. Other assist the

XX% Adjusted at summary, to expansion, We we an for focus share journey and of expect the the progress the is lower of the XX% per tax to on soft second our to quarterly a approximately XX%, strength year on full due unwavering sheet expected earnings quarter share midpoint. to EBITDA with to continue cash transformation margin second market. the percentage the quarter year as exceed be profile. In balance full with EPS gross gains a contribution make in generation, adjusted

execution that confident call growth Don. I and to now for company value can the that, successful long-term will back position are pass our We the creation. With of strategy

you, Thank Pat.

we our execution against momentum quarter our is building another and As team. report our energizing of consistent progress, plan

to Tools are continues to market leadership a culture Black Xx. on streamlined Stanley. strength profitability most continues with built organic more by enable investments particularly business our and & and outpace of Decker our emphasis the positions to on brands. Fastening. become Engineered As an to growth Outdoor We and these focusing our Stanley intensified & people DEWALT, in we can organic X growth behind CRAFTSMAN core the investments improve, believe market powerful our

returns. higher positioning execution, and focused to long-term company drive flow levels profitability growth, the on of revenue organic cash sustainable shareholder while deliver We are strong consistent to

Dennis. Q&A, for ready now are we that, With

please. Shannon, Great. Thanks, you. the we start Don. can Q&A, Thank now

Instructions] [Operator

of the is Barclays. line of question from Julian Mitchell first Our

margin? Just on my honing little for revenue sequential tax assumption it's and the for down year-on-year or flattish X% sure, you're and assuming free then a to to also of thinking to just bit. year-on-year low that rate, in what would QX, make based a we be wanted in the XXs make Is operating sort still flattish how on quarter, I second think think like comment and in just broad check around sure guess, seasonality the sort And question of kind Outdoor? just that about cash. the that's I Maybe we of are QX? QX

those, see unpack them. Julian, of Yes. I'll remember can to try if I all

I think you starting with sales.

think think the first I slightly probably down down flat it was -- quarter sales one that don't there'll to be be fractionally be won't I down. will about point, steep.

And X-ish your of code. in percent, you're OM ZIP the margin

think broadly I consistent of playing guide. the our a first in year half with seems from out the be the consensus that's manner to original

I ZIP so in the And think code. that's all

going a plus yes, cash $XXX In of slightly What flat to drive I output like be of our the -- year, year, inventory, to year, is still $XXX it inventory than to cash, be for and then cash everybody up We'll 'XX this quarter. that more we out took expansion flow balance. be million. And I'd using driven billion cash up will million driver massive remind cash drive terms of expansion flow. margin through will to be think but is $X year. Last this will last differently about was income the cash

producers profits this we'll have operating but so by of be the driven roughly the same cash disproportionately order of year. this year magnitude, And

are going revenue to the way margin expansion operating quarterly those so the the obviously, flows. profits flow And and

here the being last to it I the but delta had, quarter, we that's the what's first but second really expected, quarter is we the versus like and in quarter, less be flat net year-over-year we that's up observed inventory flow quarter year. in think as first reduction, when slightly get I cash nice will think more first organic had the so a in And

In and timing Outdoor, welcome, in Chris carries is two comments, through see that magnitude of to of a the order we've pretty balance that. season, seasons, in the early hope terms tough plays out which his where of we'll seen would and start season, outdoor coming it's of but as season, mentioned more throughout, traditional the welcome we but the certainly off and

that that if continued, Outdoor on a growth trajectory. put And would so obviously,

question Baird. Wojs Our Tim next of the comes from line with

could I was the DEWALT just expand hoping you growth. maybe little a bit on

DEWALT the think and of growth about underlying the as Outdoor, the of Just of just or some just just of color how trajectory. some maybe some specifically growth this whether looking user into of expansion SG&A kind drivers just inventory it's other And maybe organic of or the much just year, color maybe versus at then there, specifically growth kind sustainability availability are reinvestment and brands? on kind you you reinvesting there that

Well, thanks Chris. Tim. a is lot, This

of the the first something continued encouraged say all, portfolio, from So it was growth I'd we're bright expect seeing has it to are spot we're on been to And DEWALT momentum. we what that we continue gather side. in and by that a

rates sources would I chain more that about think there. service is supply I part If driving would the that, fill progress and for say a first and of growth of customers our are momentum transformation where we've and coming levels higher as certainly our made allowing from, foremost, the

sustainable if Secondarily, to only the user, something the a resources in actually sure investments sustainability we're into also the the for into the be to development a we're we it, our over specifically end making as really launch trajectory users, DEWALT. And is where that I'll and path to as that users end understand I'd products and think that saying think that of with going turn something that our of of into. And specifics, to far say I innovative and trend sure significant we able we're having -- those to investment DEWALT the majority think partners development a -- then are long-term in field make product have activation highlighting activation, put the that well. been about they're work engagement growth, professional product of if it as we and ongoing end our more they the of where that while driving and a but not lot I we the the that, and we're into marketplace development pro-driven dollars going brand, it continue and going pivoting and what in of as see is products investments innovation investments developing really, of can to those success drive of also, going, our as you lot that think amount about want

So good we the and the wanted encouraged progress very sustainability making prioritizing we're don't that -- anything with feel with we're way here. about I by the you to this we're add know, there? Pat, if

of field, that that field to in that I on mentioned, for million Yes. middle SG&A $XXX healthy on points is for of terms the lot the the I'd is goes portion DEWALT. $XX Tools of in of innovation. a is again, brand XX% & million it's And plus in to SG&A Outdoor of comments our year. therefore, business. A lot year, of And the XX or so of And think to in biggest about the is XX.X-ish of million $XX incremental out Tim, investment. where as mentioned, DEWALT up activation a opening DEWALT. I mean as think is of say kind Chris And I kind ends a the and going that's it minus because that fractions, basis lot

the line from question next comes Vertical Jeffrey Sprague with Research of Partners. Our

sorry in -- also, for that outflow at Big Pat but after-tax ends proceeds can and infrastructure, you maybe then then some the $XXX on the just just if and missed picture it quarter. was first, I Don the of million-ish just But cash in other for beginning, what address question loose Pat.

speak behind the are simplification as infrastructure, now with plan there view, the could operational And now, on you broadly focused forward? margin remain company portfolio other improvement that chart to Don, here of if I'm things just maybe these the as your portfolio kind that the to the happen could wondering or Don, path maybe we're more central in and elements you

Sure, question. questions I'll take Jeff. second Pat, answer you those Jeff's and maybe

the second to that and pretax range balance de say happened or it's infrastructure in XX% all that said XXX-ish the impact XXX when went front see on probably XX all quarter. Therefore, quarter the down is the the And second our down in all the are done. minimis, proceeds paper in after-tax the commercial XXX, days the financials of be the pay the road. that deal, that less the down. you'll to in a And I'd tax And range. fraction. Jeff, will

In cash by, let's that to normal One in terms a quarter. is out or There's things return compensation, driven of that is in which X other compensation outflows, go say, things bucket. first annual the predominantly. payments, variable many MICP

standards. low imagine by You XXXX can was very, very traditional

are was bucket. outflow And so the and the drivers payout 'XX happened quarter for happened this 'XX the taxes. the first of kind of that in was that And by big year that traditional payout other back for in Those to standards. X in 'XX very of low the normal standards then cash

Thanks, Pat.

all oil in some things Industrial, gas as segment, And not done little the Stanley back X businesses. Decker, of work to & done on infrastructure, question, And pruning amount particular, know, only then Security a as and so portfolio portfolio Black we've the of fair we here but businesses we've in the while at which well. related had a of

We will prune continue to based to opportunities. going evaluate value other things forward on creation

I down an our stage. not have we high-quality gotten to And need this place at some in anything there's where portfolio. urgent think ourselves assets to very a we've do

a bit XX we likely to do pruning. at months XX more there the As the to be little look opportunities in more next going will forward, portfolio

talked Some we'll And decide whether Chris it smaller months. term. over in in those the be sense over of settings has as could more to X about Outdoor long last a and the the assets portfolio some the and we look part actually at make be we have the big couple for of brands Tools of it put & that more X different of emphasis on

And so active. will continue be to we

I think in we've important it value a to pruning the that is your but demonstrated something way over that do. creates need to the for you years do that portfolio is shareholders.

of line the Michael question with comes Rehaut next from JPMorgan. Our

bit the I dial about wanted Tools in Storage. rest out you're for the on & the how playing little kind thinking of just a trends demand of in to more year

You have revenue XQ X%. growth organic down

about talking bit down to the a year scenario. little maybe full You're flat most as likely the

drove X% are going less if of And more in and the XQ destocking persisting first So had you kind that through also assume that current quarter, curious the anything trend and any I'm the storage, hand we inventory to half? about tools or the how on back was there adjustment? in or drop

mid-XX% where your Separately, backdrop on years, if as over SG&A, gains couple a XX, goals just rate the about I think should next around something can we that's if months? sneak the given XX, share and that in next sustainable XX of the another if the over one

take few Pat. is and of this and I'll Chris flows SG&A, your kind of expand revenue then on let year things. a balance Mike, the I'll

I year, year-over-year for probably then activity in of of a if noteworthy are the in to that our I deliver think had dynamic I expenses probably down the growth at as our where of from journey. look still kind likely percentage to point balance direction down comps the enterprise, think, you while the down of of you think expecting quarters, be preserving for think in as averaging you one sustainable investments XX quarter, to think profit across given do well. demand a that or I currency any the year. And And we're more some in promotional and with terms year, X-ish of this kind across manage year-over-year going to any to quarter for of is revenue basis where points balance and to to certainly difference we on the change the could those really next. I'd as I year say cash quarter be term, a longer transformation the percent, thoughtful the like that's SG&A to XX.X-ish that we're one being XXX

on growth the of a down year not talked the that that once choose we're even time gross while demand. we and have to period of backs seeing may of to farther number or for XX% forms there in macro invest market little and as X a We about or we a a yet. percentage a quite take more the margin little AGM growth for over We're above we XX% start the last for journey, a potentially bit

for of choose those a that But kind for year I modeling when growth said, this of is think investments. and returns decent to XX% for time go the XX% term we feel So there's good probably in we've assumption. a plus range to we like periods may and managing long that fraction at

Yes.

year. talk about I the step and we see markets little for macro the a if perspective from take So a back where a bit

areas, seeing bit a as some we're I very spots in the remain muted is think understood, well. widely up is range, within the about talked as and as there. the that on for That the then outdoor. And of towards. And we're and are think by conversation, investments, we we're lot opportunities specific in DIY in are little we about hone some our encouraged remains really early. that we said, general a talking we of to professional earlier But yet haven't do what market. a driving about it's we've look We're we hit our if look as point, businesses. point, and construction trending bright specifically, markets a tepid, there season that see challenges really for areas as in down thinking outdoor being where specifically And a we're any and the we're share tight at the going what kind of

you scenarios construction are think with that we're and current certainly optimistic there think environment about Because some there we how would remain what we half interest-rate-sensitive thinking to discussed of the well level be will looking coming. at fairly we and see earlier. be there. I outlook for see renovation a our prudent we the if are really, about acceleration, So businesses back it, say, could although you residential, as unlock it's of just certainly an lot as that

flattish matter I revenue And those think of reasons. that for at be it's a looking timing. prudent just to of environment think more we it's

of Our Wolfe Coe question next with from comes Research. line the Nigel

question doesn't case. I that's as perhaps It industrial think -- were So sound don't businesses Industrial necessarily more on the the the noncore. back fastening trending the the to I that like to just want remaining Jeff's come businesses, the with portfolio. businesses

my primary that's So question.

if could to But just I that. add on

businesses margin the have Do And impacting the Infrastructure the Infrastructure you XQ. the of balance business Is stranded material? that consider been confirm from Just want -- for that to that costs from progression that is the guide that? the with then year? need to

this our Pat. infrastructure it is sale portfolio. The to back Nigel, Don and guide. in April I'll in on take always the pass infrastructure was then

for April in a to a was infrastructure, our effectively of operation And and we always current or going guide results guide our early sale our assumed and from very QX our on. of continuing original out thereabouts account which results April be then so X as

share businesses auto to cost doing The proactively been they fixed their even that remaining year, the had And cost sizable the had they the this so fact year. improvement in with aero guide. And adjust team business the to part though a is the slight the on previously we that deliver there's that structure has Industrial there roughly great guide. business a our cost and been -- gaining the Industrial job, and structure in be both maybe the this deal to year have, flat in planned managing supporting guide to would business. And especially in nothing margins

portfolio, Nigel, Yes. specifically And the question on around and the industrial.

business, as we overall company. and cash continues is & to still amount since use to we after left few the XX what more. Black It acquired continues to EBITDA Fastening to acquired XX to And improve different Engineered there as pruning the with XX% of a months, businesses portions next the the EBITDA, and up grow at course, Engineered margins continue CAM, Tools Stanley And a in & platform is of back we're then, substantial we sale evaluated company business in certainly of the that, of be the Fastener well. When word to of I the is the flow Outdoor One, contributes look the the that portion So that. The as Black the will of fastening there's Aerospace portion to the future of other business we improve we significant in pieces or Infrastructure the with at for look & could Fastening Decker Decker. very then. that gross our a

there's growth As think think we we about road capital to a decide what tell. XX in more to opportunity gaining chunks XX question beyond substantial substantial provide in months, a do I Engineered of much point down Fastening of with the do business. But from view? back a it a allocation organic it share time and entirety in do industrial. little next probably will do get if us will it's of the of do to you XX in to way, more market more further the the Time ultimately And then pruning months, something flexibility you

comes Adam of line Associates. next Zelman the Our question Baumgarten from with &

POS, Just point. into a saw question April this at throughout on what and the you quarter

confident POS have outlook was, QX, plan. the with line year. was we negative, with for balance line in in remain So supporting plan say, it fairly the I'd our And or of in in largely that but the our we

that the ramp season we're into a and and POS how As see the seeing progress what nice on and with seeing with is more projections pick the we're bit of areas perspective carries little some that we're noted, outdoor from we're encouraged little late up the growth key with our given earlier has as highlight up with further that fairly seen of to continues now from some and get to bit be much we're brands. what strength movement start the with a in progress season. But line we to that POS, of through trying from have as we some of to would how

line question Joe with O'Dea Wells the Fargo. of comes from Our next

ask start to understand as on Just to relative this XXXX, how a context season, the to more is in normal traditional Outdoor see return demand more about XXXX demand you're thinking environment? any a you wanted whether to just a to and outdoor trying on

could normal thinking coming also then to And means to appreciate how be on are margin back. there we there margins environment upside about a just today for volume where relative what much Outdoor

Yes.

new as of And now, in made to being a my lot above. on up line or related the of business. talked there's things. average, and Outdoor, the over I the kind demand at an above below company experienced there's of next adjusting to what is right other Fasteners. The the of Aerospace to environment XX% outdoor Outdoor XX%, So questions portion a of commentary for dramatically presentation, place the taking which Outdoor cost over One, demand of the average is -- in now, a XX line lower of the the good but we've opportunity we're And and months about or or right do say would the that last CAM margin, that's really business, quarter there we really couple base yes, X. the it in XX

improve next to and of continue do activities that's of we phase I the over described, of and be continue which the on at business portions second And focus profitability coming that want something not what into be will be do really to to the looking this the portion to want we'll year. to in. We quarters think some Outdoor. the that The we of pruning path

if you that? the I or Pat know as grab if more far want don't As to questions, detailed Chris,

would Yes. on a versus trend has more starts year is Don's the big say still retrenching absolute next been to likely X substantially more volume, the going still down in the XXXX. I'd The even and below shape be volume recover. And year the look XXXX this dollars but as starts And like to trend starting will I if substantially the this that XXXX to or well, comment would to would certainly say a than headwind have in of anticipated we line. be most be ago. from business down normal year volume line

both cost are actions around then structure cost with our can profit base business. of improvement lot fixed product do and a so the we drive that in to And what

DeBlase with next Our line Deutsche comes the of Bank. from question Nicole

focusing just a Maybe on bit. pricing little

bit a quarter. I in the think & like looks the in expectation kind than a to slightly it in Outdoor came maybe original it was of better price be first that and Tools half, in for the negative

So what expectation perspective? year from the just a as price the for guys about you you are as seeing of competitive talk rest can for the well

Yes. This is Chris.

neutral. we're going I'd we're and all at the looking say say -- we're the basket if we the is at environment. to price/cost I'd we of environment, to And price/cost try year up Nicole, what goods that in mildly at a would be but input we look what neutral sum all So have, that inflationary overall, for be costs looking we're --

bit of a take I a And broader from perspective. as that a little cost lens price on

I input hitting in we were historically some important to pretty a costs inflationary circumstances and as where peak starting peaking of our environments remember was set up it's had the retrench. significantly high and of were really that -- XXXX, those we to think unique going as volume

So if of still I cost a XX-ish broader we've kind duration, absorbed. a take overall of percent that only longer and that look recouped we've

looking competitive driving seeing at getting well more more about be importantly, that that so back seeing, far, that reactive We're So continuing as differentiation environments we're to categories of we're back margin the And be those can important thus in think sure we're their accretive to, look us. in to some there environment. rates. And to then at making we're processes are pricing that's certainly to I promotions stable but and earn quickly we environment promotional products our to as we on because a working improve historical as that levels, putting healthy. innovation more inflationary can

importance specifically, able the cordless be And promoting DEWALT we've being of talked to our about products.

are, remains So stable. we think that we where comfortable feel and the we environment

line the comes Wertheimer next with Our Research. from Rob Melius question of

I have side. question the Outdoor on another

on positive tool made comment for you share think DEWALT, the suppose more I side. market I on

it on customers? What for early of but very cetera, Outdoor? sensitivity the to et of you ticket be and may you think how ticket investment budget season on you're then portfolio on hold? And to any gain? need among Just do split breadth more second of your think part small of innovation, the Do hear positioned wanted in Outdoor? kind you same status question, big share the the versus I achieve

gain outdoor sure that for of positioned innovation we're as well with we that I do think the we previously we've have are our I've what the been accretive. And our is make feel driving think that into that biggest perspective. well. about at as opportunity showing our progress. growing we we outdoor in where market from lines And say picked that where perspective that's feel electric well we we're with of a about looking year-to-date, categories are the as stated is good dollars as portfolio. share up, wanting that great listings a margin really presence I feeling So handheld And that And prioritization some we're to would market. good really And specifically, -- share we of are think, we've we're the from the trending I

we going cautiously is the are driving that. But environment, the sure consumer us season are starting, to accretive going we're that we're in user that for we're and earlier, certainly, And far from future. bigger hesitation areas versus like with optimistic and I innovation today's levels the into make continue items. ticket, important believe ticket end how from ticket and that we've seen we'll to continue of monitor in to be As those some small any the bigger to there said in as

Our next Longbow question with Research. of comes line David the from MacGregor

can tariffs? And operations around about wanted relating and sourcing you to a chain changed procurement I since tariffs. transformation your talk the ask I just -- guess on in question on supply to and progress what's specifically just

hypothetically, know, going XXXX tomorrow, versus were what reported you And if would that if total all different your when was time much reimposed around? I the and don't tariffs tariff how they on, all last XXXX, I imposed all import back that of guess expense be if were

Sure.

a have -- about go tariffs if I'll little history XXXX. So back a we probably in here. PTSD do little But of thinking maybe bit

frame tariffs time made or not today Biden million, so And less substantial million million. in response even $XXX production increases have $XXX new price about which moves still in are that, by that and of mitigated So than marketplace. Those the probably was administration $XXX changed little $XXX we about tariffs in back offset or maybe in administration. it down to the place a that experienced million to in and

there's think potential changes future, for in changed. us occur could administration in in landscape the change 'XX. The about if early a that has As we the

that to in it's made U.S. that about So things back of the were U.S. came sold that XX% in was XX%, China Today, -- that XX%. the in were timeframe, revenue. closer

it's So substantially lower.

we world. are quarter, our the continue call geographies mentioned for drive continue that on different And as build we centers that of in chain what to we the manufacturing supply excellence out transformation, around call I last to

necessarily Asia. of Asia, in in Some will them but other of China, be in not parts

Europe. some Some in built or have been are built the being Eastern Americas and in

we we will we upon to we'd And to likely -- continue be to or moves same address. time, if actions. something to occurs, supply that, price in to well through chain able tariffs likely mitigate another with as try build do to 'XX that actions At -- if will or lever surgical the beyond, changes have that some as

continue the supply we're could work continue activity we So about The head to chain or we do we plans into program what do and build is transformation it's is planning as into looking more we than news embedded that. really on started good would We've at. that will separate the to on it that ago, of months X 'XX. some

Research. question comes Eric of Cleveland Bosshard line the from Our with next

are there. about and inventories the relative just X%. now forward, curious, to you also little what mindset follow-up, they're then and what path where retail more A down could. I'm a color ordering Tools they're Hand if what is I about retailer's And bit as selling. think inventories

with first. start the second I'll So question,

levels, little bit retail our as inventories in historical below. far As a essentially -- some the areas, not in at channel, at we're if

read a we're we a on what that's seeing I we're And seeing see we're So be we're what relatively said, and correlation good from see in. plan from on POS position we what And sales. for between to going like we in in think POS. pretty direct the good on

Tools would As that some are that are, buys. ticket earlier to the are larger outlier in Hand I I would that's the comments, far Tools, Hand and business there's there as parts that nothing Storage there. tremendous say some say that a

business the tracking. more levels well similar the short of been of in kind seen as environment. POS the those And sensitive inventory the term where feel about that have overall, Good business. good as we've to across what about the some well, and But are consumer to is we

Thank for Lange now would remarks. back conference you. closing to the Dennis I hand like to over

thank on Thanks, their have everyone please Shannon. and We'd like for me participation call. contact you just Obviously, time again any if to Thank questions. the further you.

you conference This concludes participation. today's call. your Thank for

You may now disconnect.