Stanley Black & Decker is the corporate owner of Dewalt, Craftsman, Lista, Porter Cable, Irwin, and several other tool brands. They also have partial shares in other businesses, such as MTD.
Stanley Black & Decker 2018 Revenue: $13.982 Billion
Stanley Black & Decker 2018 Tools & Storage Revenue: $9.814 Billion (70% of business) ($5.9B in power tools and equipment, $3.9B in hand tools, accessories, and storage)
Stanley Black & Decker 2018 Tools & Storage Profit: $1.393 Billion
Stanley Black & Decker 2018 Overall Net Earnings: ~$605 Million
Note: Stanley Black & Decker and TTI do not seem to calculate their segment profits in the same manner, and as such these figures should not be directly compared in the same ways that overall revenue, segment revenue, and net earnings can be.
Stanley Black & Decker’s short-term plans involve working towards a more balanced portfolio aided by capital deployment, which would also see the addition of a distinct lawn & garden category in their revenue pie chart.
Recent business news remarked that Stanley Black & Decker is entering the lawn and garden product market for the first time, but that is incorrect, as they have previously marketed outdoor power tools under Black & Decker and Dewalt brands before purchasing the Craftsman brand or a partial share in MTD.
Stanley Black & Decker has a 20% stake in MTD Products and has the option to purchase remaining 80% beginning in 2021.
They also expect that the Craftsman brand will contribute ~$1B of revenue growth by 2021.
Stanley Black & Decker has also said, in their recent Investor Presentation, that they are continually considering acquisitive growth opportunities.
TTI, Techtronic Industries, owns Milwaukee Tool, Ryobi operations in North America and several other international regions, Empire Level, Homelite, and several other tool brands. Through a licensing agreement they also operate Ridgid cordless power tool products exclusively sold at Home Depot.
TTI 2018 Revenue: $7.021 Billion
TTI 2018 Power Equipment, Accessories, and Hand Tools Revenue: $6.009 Billion (85.6% of business)
TTI 2018 Power Equipment, Accessories, and Hand Tools Profit: $598 Million
TTI 2018 Overall Net Earnings: ~$553 Million
Compared to 2017, TTI earned 17% more revenue and 16.9% more profit in their tools and equipment segment.
TTI has also said that their Milwaukee Tool business has grown 28.2% worldwide over the previous period (2018 vs. 2017). We don’t know how much revenue Milwaukee Tool earns in relation to the total sum, but we do know that the popular professional power and hand tool brand is growing year over year.
I regularly examine Stanley Black & Decker’s financial information, with their investor releases and documents providing valuable insights into the performance and direction of the company. TTI is also a publicly-traded company, and so their financial information and business performance disclosures are also readily available.
Reviewing 2018 performance for both brands, I am extremely surprised at how far both companies have come, but especially how much TTI has grown.
Financial documents can provide extremely interesting information. For example, TTI’s latest annual review says:
During the years ended December 31, 2018 and 2017, the Group’s largest customer contributed total revenue of US$3,194,744,000 (2017: US$2,760,045,000), of which US$3,143,450,000 (2017: US$2,688,536,000) was under the Power Equipment segment and US$51,294,000 (2017: US$71,509,000) was under the Floor Care and Appliances segment. There is no other customer contributing more than 10% of total revenue.
TTI’s total revenue share for North America was $5.372B in 2018, which represents 76.5% of the total.
I believe it is clear that The Home Depot is TTI’s largest customer, but objections to this opinion are of course welcome. In the the power equipment and tools segments, Home Depot distributes Milwaukee tools, Ryobi, Ridgid, Empire, and Hart. It is worth reminding the reader that Ryobi and Ridgid (power tools and equipment) are tool brands that are exclusively sold at Home Depot.
TTI’s largest customer contributed ~$3.2B of their ~$7.0B in total revenue in 2018, and ~$2.7B of their $6.0B in power equipment and tool revenue in the same period.
Stanley Black & Decker’s latest annual report discusses their acquisition of Lenox and Irwin:
In the case of Lenox and Irwin, we moved aggressively to capture the revenue synergies from these transactions. We are focused on leveraging these products within our global customer base and bringing new offerings to market, particularly in emerging markets.
They discuss their largest customer as well:
One customer, Lowe’s, accounted for approximately 12% and 11% of the Company’s consolidated net sales in 2018 and 2017, respectively. No other customer exceeded 10% of consolidated sales in 2018, 2017 or 2016.
If I am interpreting TTI and Stanley Black & Decker’s statements correctly, it means that The Home Depot (which we presume is who TTI refers to as their largest customer) contributed ~$3.2B of TTI’s revenue in 2018, or about 46% (calculated), and Lowe’s contributed approximately 12% of Stanley Black & Decker’s revenue in 2018, or about $1.68B (calculated). If accurate, this would mean that Home Depot contributes nearly twice the revenue to TTI than Lowe’s does to Stanley Black & Decker.
Update: In their 2018 annual report, Stanley Black & Decker reported:
Sales to Lowe’s were approximately 17%, 16% and 15% of the Tools & Storage segment net sales in 2018, 2017 and 2016, respectively. Sales to The Home Depot were approximately 14%, 13%, and 14% of the Tools & Storage segment net sales in 2018, 2017 and 2016, respectively.
TTI does not provide a tools-segment-only revenue contribution of their largest customer.
It is interesting to note that Lowe’s contributed 17% of Stanley Black & Decker’s tools and storage segment revenue in 2018, and Home Depot 14%. Compared to total revenue, Lowe’s contribution is decreased to 12% overall, and Home Depot’s to less than 10%. It is interesting to note that Home Depot and Lowe’s combined contribute to ~31% of Stanley Black & Decker’s tools and storage revenue.
While the revenue contribution from Lowe’s increased from 15% in 2016 to 16% in 2017 and 17% in 2018, I would have anticipated a greater difference, given the volume of Craftsman tools that Stanley Black & Decker shipped to Lowes during the 2018 winter holiday shopping season, but it is difficult to interpret and infer about these matters without more information.
It will definitely be interesting to see what 2019 has in store for both companies and their growing tool brands.