Stanley Black & Decker (SWK, Financial) released its fourth quarter 2021 financial results earlier this week and disclosed plans for a $4 billion share repurchase program over the coming months.
Net sales for the fourth quarter were $4.1 billion, up 2% versus the prior year, the company reported, as price (+5%) and acquisitions (+6%) were partially offset by lower volume (-8%) and currency (-1%). Volume was impacted by a series of logistical and other supply chain challenges.
For all of 2021, revenues for the global tool maker totaled $15.6 billion, a leap of 19.6% over the previous year. Strong consumer demand fueled record full year organic revenue growth of 17% and 30% adjusted diluted EPS expansion.
Executives also announced a roughly $4 billion share repurchase program coming during 2022, with $2 billion to $2.5 billion of it expected to take place during the first quarter.
Stanley Black & Decker delivered record revenue and earnings growth in 2021, supported by robust customer demand and its growing portfolio of product innovations. CEO Jim Loree said, "We completed 2021 with a series of strategic transactions that focused our core business, including establishing Stanley Black & Decker as a global leader in the $25 billion outdoor power equipment market as well as announcing the pending sale of our electronic security business.â Those actions, he noted, strengthened the firmâs number one position in tools.
Loree added, "While we continued to navigate an extremely dynamic supply chain and inflationary environment as the year progressed, we are focused on even stronger day-to-day operational execution, inventory management and pricing realization.â
Most importantly, the CEO explained, Stanley Black & Decker is leveraging key investments in product innovation, strategic growth initiatives as well as capacity expansions to better serve customers who are experiencing unprecedented demand. He emphasized that the company is well positioned with a more focused portfolio that provides it with a âcompelling multi-year runwayâ for growth, margin expansion and long-term shareholder value creation.
Donald Allan Jr., President and chief financial officer, added in a statement that during 2021, Stanley Black & Decker delivered 17% organic revenue growth with operating profit expansion and 30% adjusted earnings per share growth. âWhile we were not satisfied with the fourth quarter volume and cash flow performance driven by the constrained and congested supply chain, we are confident in the steps we have taken and are continuing to take.â
By yearâs end, the company had implemented price increases to mitigate inflationary impacts while improving efficiencies and investing in expanded capacity to support the continued growth projected for 2022 and beyond.
Looking ahead, Stanley Black & Deckerâs management team remains focused on driving above-market organic growth, delivering on their price and cost control measures, successfully integrating MTD and Excel into the portfolio and leveraging the SBD Operating Model to improve working capital efficiency. It expects that these actions, as well as the $4 billion allocation to repurchase shares, will deliver total revenue growth in the mid-twenties range, in addition to 15% to 19% adjusted earnings per share growth.
Despite high growth goals, maintaining margins may continue to be a concern. Inflationary pressures and supply chain issues have taken a toll on margins, and it's not yet clear how well the company will be able to manage this going forward.
