Investing.com -- Tool maker Stanley Black & Decker Inc (NYSE:SWK) said Wednesday that because of the U.S. tariffs, it raised prices in the “high-single digits” in April and will raise them further at the start of the third quarter. The company also stated it will be moving its supply chains from China to Mexico.
The update from the tool maker came with its first quarter earnings report today. During the quarter, the company beat on the bottom line and matched on the top line. However, the company said they see FY 2025 adjusted EPS of $4.50, which is below the consensus of $4.91.
Stanley Black & Decker highlighted that over the past several years, they have substantially reduced its China manufacturing footprint, which serves the US market, and said it plans on effectively being out of China supply for the US business in the twelve to twenty-four months.
“We believe we have the most flexible supply chain footprint in the industry as we now have significant hubs in the US, Mexico, and Southeast Asia that serve the US market,” the company stated. “As we navigate these shifts in trade policy, we are starting from a strong position due to these existing hubs. We intend to build upon them to minimize the impact of higher input costs from tariffs over the next twelve to twenty four months.”
The company stated that Mexico is only one-third USMCA compliant currently, so there is work to do there.
“… we’re about one third USMCA compliant from our COGS from Mexico to The US today,” the company stated on its call. “There’s the obvious benefit of then reducing the tariff burden from Mexico at 25%, But we have a lot of great assets and capacity in Mexico and so the extent to which we dual source already products that we can move more of the volume to Mexico or to the extent with some modest equipment moving or capability building in Mexico take volumes that aren’t dual source today.”
Shares of Stanley Black & Decker last traded down 4% as of 11:09 AM ET.