New Britain’s Stanley Black & Decker weathers coronavirus

Do-it-yourself and e-commerce surge during pandemic

Strong home center sales and internet purchases by homeowners forced by the coronavirus to stay put are powering unexpectedly strong revenue for tool and equipment storage manufacturer Stanley Black & Decker Inc.

Retail sales in tools and storage equipment are still negative for the quarter ending June 30. But the New Britain company revised its outlook to a 20% to 30% drop, an improvement from guidance in April of a fall of between 35% and 45%.

“You certainly can point to the DIY coming alive as the single biggest factor,”

Chief Executive Officer James Loree said Wednesday at an industry analysts’ web-based conference. “All these folks at home looking for things to do in some cases. There’s pentup demand for projects in the home.”

“You know how well e-commerce is doing in this environment,” Loree said. “We are exceedingly well-positioned to leverage the trends that are going on.”

Loreee called the burst in do-it-yourself projects a “nice sideline to distraction from some of the boredom” experienced by homeowners with nowhere to go.

The improved outlook could “bode very well” for 2020, he said.

“That better growth is really great news,” Loree said. “Is it sustainable? We shall see over time. But right now I’d say we’re feeling pretty good about the growth picture moving forward.”

The strong outlook is a rare bit of good news in an economy that has nearly flatlined with businesses shut, millions of workers laid off or furloughed and consumers, who account for 70% of economic activity, slowing spending to a crawl.

It’s also a positive development for Stanley Black & Decker, which has been battling tariffs, price inflation in metals used to make tools and other products and a strong dollar that makes U.S. exports more expensive and less competitive overseas.

Loree warned that despite improved sales now, the future of the economy will still be hostage to the coronavirus.

“When the stimulus expires and we have 15% to 25% unemployment, what’s demand going to look like?” he said. “There’s just so much uncertainty out there.”

Shares jumped more than 4% Wednesday, closing at $127.13, the second consecutive day investors drove up the price. Chief Financial Officer Donald Allan Jr. announced the improved guidance at a conference Tuesday and Loree amplified the positive outlook.

Allan credited part the revenue growth of to sales of Craftsman tools that he said are “performing incredibly well.”

He said Stanley Black & Decker’s industrial business “continues to be difficult” as automaker customers remain on hold. The unit makes fastening systems for auto and electronic manufacturing and equipment for pipeline construction.

“It’s a mixed bag, but there’s certainly more positive in there that we’re seeing than there are negative,” Allan said.

Loree also said Stanley Black & Decker’s storage equipment business is poised for growth in technology expected to develop in response to the pandemic.

“The opportunities in security are falling off the trees,” he said.

Loree cited developing health care technology tracking equipment and safety and protection at nursing homes.

Technology also will drive innovation in automatic doors, Loree said. “Who wants to touch a door anymore?” he said.

Stanley Black & Decker announced in early April spending and workforce cuts in response to a sharp decline in sales due to the pandemic.