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In a financial coincidence, Stanley Works and Black & Decker—two of the storied names in American hardware—both posted first-quarter earnings of about $68 million. However, that’s where the similarities ended—with Stanley describing slight increases over last year, and Black & Decker pointing to declines in sales and earnings.
“Black & Decker’s results this quarter reflect an increasingly difficult business environment. Demand for tools and home improvement products decreased sharply in North America, and commodity costs continued to rise,” said Nolan Archibald, chairman and CEO.
Towson, Md.-based Black & Decker reported net sales of $1.49 billion for the quarter, down 5.1 percent from $1.57 billion as reported last year. Net earnings declined 37.6 percent to $67.4 million, down from $198.1 million in the same quarter last year.
The company also reported it would be cutting approximately 700 jobs.
Archibald said that sales in power tools and accessories segment decreased 10 percent for the quarter, which he attributed to the down turn in residential construction.
Sales in the hardware and home improvement segment decreased 14 percent, according to Archibald.
“Today’s business climate, including the housing down turn and related credit tightening, poses one of the toughest challenges Black & Decker has faced in many years. We remain confident that our efforts to improve the company’s geographic balance and cost structure will enable us to manage through this period effectively,” said Archibald.
He added that the company would be reducing expense levels especially in their power tool section.
New Britain, Conn.–based tool manufacturer Stanley Works reported first-quarter net earnings of $68.0 million, up 0.6 percent from $67.6 million last year. Net sales were $1.09 billion, up 3.3 percent from $1.06 billion from last year.
John Lundgren, chairman and CEO of Stanley Works, noted that the company’s consumer DIY sales were flat, but the company’s industrial segment saw growth.
“Despite continued contraction of several key U.S. markets, we were able to deliver earnings improvement and solid cash flow results due to strength in security, industrial Europe and engineered solutions,” said Lundgren.
Lundgren also mentioned the effect the anti-dumping tariffs imposed on imported fasteners from China and the United Arab Emirates would have on Stanely’s Bostitch fastener brand.
“In the short term, it’s neutral, neither positive nor negative,” he said. “In the long term, we think it’s an advantage for Bostitch.” Lundgren mentioned that while the tariffs ranged from 4 percent to 114 percent, Bostitch only incurred a mild tariff of 19 percent, well below much of the competition. Lundgren also pointed out the fact that Bostitch has production facilities in North America and Poland as well as Beijing, and production can be transferred across the three continents as needed.