Stanley Black & Decker, Inc. Morgan Stanley's 14th Annual Laguna Conference

Well, thanks. Thanks for having me. It is great to be here. It is about coming up on a year into me in this role and just a little bit of an update. At the beginning, as I was stepping in, laid out three key priorities for our organization. First was to make sure that we really activated our brands with purpose. We, last quarter, reported growth in our three core brands of focus. So we feel like we are making nice progress there with the investments and the focus that we have made in the brands. The second one was to drive improved operational excellence, and we continue to march upon, in what is not the most robust volume environment, march towards our margin objectives. This year, we are feeling good about where we have guided to on our margins and progressing towards the 35% gross margin area that we have laid out.

The third one was to really, for the long-term lifeblood of the organization, to accelerate our pace of innovation. Not only by the end of this year we will have improved our cycle time of our innovation cycle by 30%, but it is really showing up in a robust pipeline of new products we have got coming out into DEWALT, Stanley, and Craftsman. So I really feel like the team is organized and rallied around those objectives, and we are making nice progress, and it is showing up in the financial results as well.

No, I feel like we're kind of on pace for where I would've expected to be.

Our say/do ratio has been high, which is really what I needed to make sure we saw happen organizationally coming out of the gates. I'd say that kind of on pace for what we've laid out, and we still feel really good about the three-year plan that we laid out at our investor day a couple of years ago. Probably, the market has not been as robust as we would've liked, and I'd say that certainly the volatility that we've seen has been higher than I would've anticipated from everything, from geopolitical, trade policy, et cetera.

Where I feel like we're ahead of the game, is that I think that we have, due a lot to the volatility and the market environment, we've built a team and a resiliency and flexibility to be able to adjust and continue on towards our objectives regardless of the environment, which I think is really the most important thing to build in an organization.

Yeah. I'd say we expected our overall market to be in the flattish range when we laid out our three-year plan and maybe up a tick or so, but we're still in that same world. What I would say is that probably the construct there in has been a little different. The commercial and industrial professional, I'm sure that's not a new theme from what people have been hearing. It's been very strong for us, and our presence and progress in that marketplace has been solid. I think that side of the professional has been strong. We haven't seen any real appreciable inflection, no surprise to anybody, in the housing market. I'd say that the consumer and the DIY world remains surprisingly resilient in today's world.

Now it's not anything that is driving a significant amount of growth, but it's stabilized and allowing those other, certainly on what we see in commercial and industrial, to be more reading through.

Yeah. Well, I will start with DEWALT. For those of you who are just new to the story, I have been with Stanley Black & Decker for call it a little over 3 years. Been in this seat for about a year. But when I came in and was asked as COO to lay out what was going to be our growth and kind of transformation strategy from the go-to-market brands as well as operationally. No surprise to anyone, we started with DEWALT. DEWALT, it is the largest franchise. It is about half the revenue of the company. It is very strong in the professional ranks and in the end markets that we saw being the most attractive from a growth perspective in the short to medium term.

So, really what that came down to was redoubling our efforts to not only win with the professional, but expand from what has been our traditional strength in the residential or carpentry trades into increasingly investing in from both a product perspective as well as a go-to-market and channel perspective in more of the commercial, industrial, mechanical, electrical, plumbing, concrete. That has been an ongoing multi-year effort to which we have been growing consistently above market. We have been taking share, and we really, really like not only the progress we have been making in that market, but certainly when you look at the build-up that is happening in data centers or with energy, we like the longevity of that story as well. So feel really good about where we are from DEWALT.

Then, we also at that point laid out what our three core brands that we were going to really focus our efforts from a capital and resource perspective on, and it was going to be DEWALT, Craftsman, and Stanley. If I go to Stanley next, we really wanted to define what Stanley was going to be as a brand, and let us just say people had not paid a bunch of attention to it. Therefore, it had kind of lost its way as more of a retail kind of DIY-ish brand, certainly in North America, and was still strong in Europe, but I would say under-resourced.