SWK · 10-Q · 2026Q4 · Full report
Gross Margin Drivers
STANLEY BLACK & DECKER, INC. · 2026-11-04 · Importance 59 · Surprise 48 · No source text
Third-quarter 2026 gross profit was $1.454 billion, or 39.0% of sales, compared with $1.179 billion, or 31.4%, in the prior-year quarter; adjusted gross margin increased to 39.4% from 31.6%. For the first nine months, gross profit was $3.917 billion, or 33.9% of sales, versus $3.366 billion, or 29.4%; adjusted gross margin rose to 34.4% from 29.8%. Management attributed the margin improvement to operational cost improvements, favorable product mix, and an approximately 430-basis-point net benefit from tariff refunds after directly attributable offsets. The Company recognized $181 million of pretax IEEPA tariff-refund gains in third-quarter cost of sales and $299 million year to date, partly offset by $48 million and $132 million, respectively, in compensation costs and growth investments.
Key facts
- Third-quarter gross profit was $1.454 billion, or 39.0% of sales, versus $1.179 billion, or 31.4%, in third-quarter 2025. source
- Third-quarter 2026 cost of sales was $2.278 billion, compared with $2.577 billion in third-quarter 2025. source
- First-nine-month 2026 gross profit was $3.917 billion, or 33.9% of sales, compared with $3.366 billion, or 29.4%, in 2025. source
- Third-quarter gross profit margin excluding Non-GAAP adjustments was 39.4%, compared with 31.6% in third-quarter 2025. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | positive | realized | +14.8% | First-nine-month 2026 gross profit was $3.917 billion, or 33.9% of sales, compared with $3.366 billion, or 29.4%, in 2025. |
| margin | positive | realized | +4.5% | First-nine-month 2026 gross profit was $3.917 billion, or 33.9% of sales, compared with $3.366 billion, or 29.4%, in 2025. |