Hit with inflation, Stanley Black & Decker cuts 2022 profit outlook, but remains optimistic on rising home remodeling business – Hartford Courant

Stanley Black & Decker, hit by soaring commodity and transit costs, said Thursday it’s scaling back its profit outlook for the year.

The New Britain tool maker also cited a business divestiture and the shutting of a Russia business as reasons for a reduced bottom line this year.

[ Stanley Black & Decker expects pandemic boom in do-it-yourself home improvements to continue ]

Shares closed sharply lower, at $127.13, down 8.6%.

Stanley Black & Decker said it now expects adjusted per-share earnings for the year to be between $9.50 and $10.50, down from previous guidance of $12 to $12.50. Price increases are expected to reduce the impact of the highest inflation in 40 years.

“I’m very, very pleased actually with the ability to implement price and offset the inflation with price increases because historically we’ve never had this hyper inflation,” Chief Executive Officer James Loree told industry analysts on a conference call reviewing first-quarter financial results.

He remains optimistic about the home repair business critical to Stanley Black & Decker sales. Despite slowing global growth and rising interest rates in the U.S., repair and remodeling are expected to grow due to an aging housing stock, tight housing supply and remodeling financed by rising home values, he said.

Stanley Black & Decker announced last week it was selling its automatic doors business, Access Technologies, to Allegion for $900 million in cash. The Access Technologies business, which patented the first hands-free door operator in 1931, generated about $340 million in revenue last year.

It’s now recorded as a discontinued operation, contributing to the reduced profit estimates for the year. The sale is the final piece of the company’s divestiture of its security business and is subject to regulatory approval. It’s expected to close mid-year.

Stanley Black & Decker posted first-quarter revenue of $4.4 billion, up 20% over the same period last year that was due largely to acquisitions in outdoor power equipment business and higher prices to keep up with inflation. It fell short of Wall Street estimates of $4.59 billion, according to Zacks Investment Research.

Adjusted earnings per share of $2.10 beat analysts’ estimate of $1.68.

Stephen Singer can be reached at [email protected].