The big tool maker is taking steps to address the current tariff situation which also includes moving some production out of China.
In announcing its first quarter results that saw a small decline in revenues but a substantial increase in earnings, Stanley Black & Decker said it had raised prices by “high single digits” in April and was looking at a second round of increases, as yet undecided, over the summer. It also said it was adjusting its supply chain to become more compliant with the U.S.-Mexico-Canada agreement (USMCA) and reduce its manufacturing footprint in China as a result of the ongoing shifts in the global sourcing sector driven by US tariffs.
“While the magnitude and frequency of these changes has exceeded our expectations, we have been and remain prepared to address this dynamic trade environment, and we are responding,” President and CEO Donald Allen told analysts on its most recent quarterly call.
The company, whose portfolio besides its namesake brands includes DeWalt and Craftsman, said it plans to speed up supply chain adjustments by leveraging its North American footprint, notably in Mexico, while reducing tariff costs in China. It said it has been actively reducing its footprint in China, which is now at about 15 percent of its product mix with the goal of taking that down to zero by 2027.
“This is a high priority and will remain a key focus even if China tariffs go to lower levels,” the company said. It is also working on mitigation actions to be able to bring in more products from Mexico duty-free: currently less than one-third of its Mexico supply is able to enter the US tax-free through the USMCA trilateral trade deal.
“We are thoughtfully and aggressively navigating the path forward as we focus on serving our customers, optimizing our cost structure, and protecting cash flow as we position the business to achieve its long-term potential,” the company said. “These environments present as many opportunities as there are challenges, and we are squarely focused on both.”
