NEW YORK, March 27, 2023 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the District of Connecticut on behalf of all persons or entities who purchased the securities Stanley Black & Decker, Inc. (“SWK” or the “Company”) (Nasdaq: SWK) between October 28, 2021 and July 28, 2022, both dates inclusive (the “Class Period”).
The Complaint alleges that Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, the Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that: (i) rising interest rates, inflation, and trends in returning to work away from home were quickly eroding then-heightened demand for Stanley Black & Decker’s tools and outdoor products; (ii) the heightened, extraordinary demand Stanley Black & Decker had enjoyed as a result of the COVID-19 pandemic in 2020 into 2021 was returning to 2019 pre-pandemic levels; (iii) Stanley Black & Decker’s operations were already showing signs of slowing demand; (iv) as a result of reorganization, share repurchasing, and dividend growth, Stanley Black & Decker lacked the cash to react quickly to changes in demand; and (v) as a result of Stanley Black & Decker’s inability to react to a sharp decline in demand, Stanley Black & Decker’s results and metrics, particularly sales volume, were severely negatively impacted.
On April 28, 2022, Stanley Black & Decker announced that net sales for its Tools and Outdoor operating segment had dropped in the first fiscal quarter of 2022 to $4.4 billion and that Stanley Black & Decker was accordingly revising its earnings per share guidance down for fiscal year 2022. Stanley Black & Decker also revealed that gross margin dropped “610 basis points from prior year as price realization was more than offset primarily by commodity inflation, higher supply chain costs to serve demand and lower volumes.” On this news, Stanley Black & Decker’s stock price declined more than 8%.
Then, on July 28, 2022, Stanley Black & Decker announced that “significantly slower demand in late May and June . . . drove the majority of the challenges we faced this quarter” and that “[a]s the softening of the demand environment accelerated rapidly during the last portion of the quarter . . . [w]e are now preparing for demand to normalize closer to 2019 levels for the remainder of 2022.” Stanley Black & Decker also revealed that due to a sharp slowdown in consumer demand for power tools in May through June 2022, sales volumes had in fact shrunk by double digits, Stanley Black & Decker’s net income for its second quarter had plunged to $87.6M compared to $459.5M in the year earlier quarter, and that Stanley Black & Decker was cutting its 2022 earnings per share guidance by nearly half. On this news, Stanley Black & Decker’s stock price declined more than 16%, further damaging investors.
Investors who purchased or otherwise acquired shares of SWK should contact the Firm prior to the May 23, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
