Investing.com – Stanley Black & Decker stock (NYSE:SWK) fell more than 4% Thursday after rising costs and wages forced it to cut its annual sales and profit forecast.
The company also delivered short of expectations on the revenue front in the third quarter. Earnings per share of $2.56 beat estimates.
The company had raised the forecast in July after second-quarter revenue soared 37% but that growth tempered to 11% in the third quarter to hit $4.3 billion, leading the company to revise its numbers one more time.
Stanley Black now sees an adjusted profit per share of $11 at the midpoint compared to $11.5 at the center of the previous range. Similarly, organic revenue growth is expected to be 16.5% at the midpoint compared to 17% at the center of the range given earlier.
Higher volume and price hikes were mostly behind the rise in revenue but it was more than offset by accelerated commodity, transportation and labor inflation required to meet strong demand, the company said. Gross margin eroded by 310 basis points to around 33%. One basis point is one-hundredth of a percent.
Sales growth was strongest in the company’s mainstay of tools and storage, as demand came from both retail and commercial segments.