Stanley Black & Decker Q3 2026: Big Beat Driven by Tariff Refunds

Stanley Black & Decker reported adjusted earnings per share of $2.31 for the third quarter of 2026, against a Wall Street consensus of $1.56, a beat of roughly 48%. That headline number, however, requires an asterisk: approximately $0.67 of that upside came from net IEEPA tariff refunds, which also contributed around 430 basis points of gross margin expansion. Strip out that one-time tailwind and the quarter looks considerably more ordinary.

Revenue came in at $3.73 billion, essentially matching estimates and representing a decline of about 0.7% from the same period a year earlier. The divestiture of Consolidated Aerospace Manufacturing in April 2026 and a shift to a licensing model for outdoor gas products masked what management described as 4% organic growth. Tools and Outdoor, the company's dominant segment, posted North America organic growth of 6% and saw segment margin expand to 17.0%.

The quarter extends Stanley Black & Decker's streak of beating Wall Street's earnings expectations to six consecutive quarters. Looking at the EPS history, the company has topped consensus in every period from Q4 2024 through Q3 2026, with this quarter's reported figure the highest of that run. That consistency has given management enough confidence to raise and tighten full-year adjusted EPS guidance to a range of $5.95 to $6.25, up from a prior range of $5.20 to $5.80.

Free cash flow guidance was lifted sharply, to $1.0 to $1.2 billion from a prior range of $600 million to $800 million. Operating cash flow for the quarter reached $658.5 million, and free cash flow came in at $585 million, both dramatically improved from a year ago. The board also authorized a new $1 billion share repurchase program expiring October 2029, after the company fully utilized a $500 million authorization from April 2026 by buying back roughly 2.5 million shares in the quarter for approximately $250 million.

The main soft spot was Engineered Fastening, where revenue fell 21% year over year, with the CAM divestiture accounting for 22 percentage points of that decline and modest organic growth of 2% only partially offsetting weak automotive demand. Pricing was down 2% across the company, and SG&A rose to 24.2% of sales. Investors will want to track whether the tariff refund tailwind persists or fades in coming quarters, and whether organic momentum in Tools and Outdoor can hold without that support.