STANLEY BLACK & DECKER, INC.

Previous wording

The Company is a global provider of hand tools, power tools, outdoor products and related accessories, as well as a leading provider of engineered fastening solutions. In recent years, the Company has re-shaped its portfolio through a series of divestitures. These divestitures reflect the Company's ongoing strategic commitment to simplify and streamline its portfolio to focus on its leading market positions in tools and outdoor, as well as engineered fastening systems.

Current wording

The Company is a global provider of hand tools, power tools, outdoor products and related accessories, as well as a leading provider of engineered fastening solutions. In recent years, the Company has reshaped its portfolio through a series of divestitures. These divestitures reflect the Company's ongoing strategic commitment to simplify and streamline its portfolio to focus on its leading market positions in tools and outdoor, as well as engineered fastening systems.

Previous wording

On April 23, 2026, the Board terminated the previous share repurchase program (the “April 2022 Program”) and approved a new share repurchase program of up to $500 million in purchase price of shares of the Company's common stock ("the April 2026 Program"). As of July 4, 2026, the authorized amount remaining under the April 2026 Program was approximately $250 million after giving effect to open market repurchases made in the second quarter of 2026, as further discussed below. The April 2026 Program will expire 36 months from April 23, 2026. The Company may repurchase shares under the April 2026 Program through open market purchases, privately negotiated transactions or share repurchase programs, including one or more accelerated share repurchase programs (under which an initial payment for the entire repurchase amount may be made at the inception of the program). Such repurchases may be funded from cash on hand, short-term borrowings or other sources of cash at the Company’s discretion, and the Company is under no obligation to repurchase any shares pursuant to the April 2026 Program. The authorized amount available for share repurchases under the April 2026 Program does not include approximately 2.4 million shares remaining under a forward share purchase contract entered into in March 2015 as further discussed below, which were reserved and authorized for purchase under the Company’s approved repurchase program in place prior to the April 2026 Program.

Current wording

On October 29, 2026, the Board terminated the April 2026 Program and approved a new share repurchase authorization of up to $1 billion in purchase price of shares of the Company's common stock (the "October 2026 Share Repurchase Authorization"). The October 2026 Share Repurchase Authorization will expire 36 months from October 29, 2026. The Company may repurchase shares under the October 2026 Share Repurchase Authorization through open market purchases, privately negotiated transactions or share repurchase programs, including one or more accelerated share repurchase programs (under which an initial payment for the entire repurchase amount may be made at the inception of the program). Such repurchases may be funded from cash on hand, short-term borrowings or other sources of cash at the Company’s discretion. The Company is under no obligation to repurchase any shares pursuant to the October 2026 Share Repurchase Authorization and repurchases may be suspended or terminated at any time at the Company's discretion.

Previous wording

On April 6, 2026, the Company sold the CAM business to Howmet Aerospace for $1.8 billion in cash. The Company deployed the vast majority of the net proceeds to reduce debt and repurchase shares in the second quarter of 2026. Through the date of sale, net sales and segment profit for the Engineered Fastening segment included $117.0 million and $22.0 million, respectively, related to the CAM business. See below for further discussion of the Company's business segments and results.

Current wording

On April 6, 2026, the Company sold the CAM business to Howmet Aerospace for $1.8 billion in cash. The Company deployed the vast majority of the net proceeds to reduce debt and repurchase shares in the second and third quarters of 2026. Through the date of sale, net sales and segment profit for the Engineered Fastening segment included $117.0 million and $22.0 million, respectively, related to the CAM business. See below for further discussion of the Company's business segments and results.

Previous wording

Refer to Note Q, Divestitures, for further discussion.

Current wording

The pending Excel sale and CAM divestiture are part of the Company's ongoing strategic commitment to refine its portfolio to focus on its core Tools & Outdoor and Engineered Fastening businesses. Refer to Note Q, Divestitures, for further discussion.

Previous wording

On April 6, 2026, the Company completed the sale of its CAM business to Howmet Aerospace. This divestiture does not qualify for discontinued operations and therefore, the results of the CAM business are included in the Company's Consolidated Statements of Operations and Comprehensive Income through the date of sale.

Current wording

On April 6, 2026, the Company completed the sale of its CAM business to Howmet Aerospace. This divestiture did not qualify for discontinued operations and therefore, the results of the CAM business are included in the Company's Consolidated Statements of Operations and Comprehensive Income through the date of sale.

Previous wording

The Company’s operating results at the consolidated level as discussed below include and exclude certain gains and charges impacting gross profit, SG&A, Other, net, and Income taxes. The Company’s business segment results as discussed below include and exclude certain gains and charges impacting gross profit and SG&A. Corporate overhead as discussed below includes and excludes certain gains and charges. These amounts for the second quarter and year-to-date periods of 2026 and 2025 are as follows:

Current wording

The Company’s operating results at the consolidated level as discussed below include and exclude certain gains and charges impacting gross profit, SG&A, Other, net, and Income taxes. The Company’s business segment results as discussed below include and exclude certain gains and charges impacting gross profit and SG&A. Corporate overhead as discussed below includes and excludes certain gains and charges. These amounts for the third quarter and year-to-date periods of 2026 and 2025 are as follows:

Previous wording

Below is a summary of the pre-tax Non-GAAP adjustments for the second quarter and year-to-date periods of 2026 and 2025.

Current wording

Below is a summary of the pre-tax Non-GAAP adjustments for the third quarter and year-to-date periods of 2026 and 2025.

Previous wording

Net Sales: Net sales were $3.961 billion in thesecond quarter of 2026 compared to $3.945 billion in thesecond quarter of 2025, relatively flat year-over-year, as a 3% increase in volume and a 1% increase from foreign currency were offset by a 3% decrease from the CAM business divestiture and a 1% decrease from strategic outdoor product line transitions. Tools & Outdoor net sales increased 3% compared to the second quarter of 2025 as a 3% increase in volume and a 1% increase from foreign currency were partially offset by a 1% decrease from strategic outdoor product line transitions. Engineered Fastening net sales decreased 18% compared to thesecond quarter of 2025 as a 21% decrease from the CAM business divestiture was partially offset by a 2% increase in volume and a 1% increase in price.

Current wording

Net Sales: Net sales were $3.732 billion in thethird quarter of 2026 compared to $3.756 billion in thethird quarter of 2025, represen ting a decrease of 1%, as a 3% decrease from the CAM business divestiture, a 2% decrease in price, and a 2% decrease from strategic outdoor product line transitions were partially offset by a 6% increase in volume. Tools &Outdoor net sales increased 2% compared to the third quarter of 2025 as a 7% increase in volume was partially offset by a 3% decrease in price and a 2%decrease from strategic outdoor product line transitions. Engineered Fastening net sales decreased 21% compared to thethird quarter of 2025 asa 22%decrease from the CAM business divestiture anda 1% decrease from foreign currency were partially offset by a 1% increase in volume and a 1% increase in price.

Previous wording

Net sales were $7.807 billion in the first half of 2026 compared to $7.690 billion in the first half of 2025, representing an increase of 2%, as a 2% increase from foreign currency and 1% increase in price were partially offset by a 1% decrease from the CAM business divestiture. Tools & Outdoor net sales increased 2% compared to the first half of 2025 as a 2% increase in price and a 2% increase from foreign currency were partially offset by a 1% decrease in volume and a 1% decrease from strategic outdoor product line transitions. Engineered Fastening net sales decreased 4% compared to the first half of 2025, as a 10% decrease from the CAM business divestiture was partially offset by a 4% increase in volume, a 1% increase in price, and a 1% increase from foreign currency.

Current wording

Net sales were $11.539 billion in the first nine months of 2026 compared to $11.446 billion in the first nine months of 2025, representing an increase of 1%, as a 2% increase in volume and a 2% increase from foreign currency were partially offset by a 2% decrease from the CAM business divestiture and a 1% decrease from strategic outdoor product line transitions. Tools & Outdoor net sales increased 2% compared to the first nine months of 2025 as a 2% increase in volume and a 1% increase from foreign currency were partially offset by a 1% decrease from strategic outdoor product line transitions. Engineered Fastening net sales decreased 10% compared to the first nine months of 2025, as a 15% decrease from the CAM business divestiture was partially offset by a 3% increase in volume, a 1% increase in price, and a 1% increase from foreign currency.

Previous wording

Cost of Sales and Gross Profit: The Company reported cost of sales of $2.655 billion in thesecond quarter of 2026 compared to $2.879 billion in thesecond quarter of 2025. The year-over-year change in cost of sales was primarily driven by operational cost improvements and the net benefit related to tariff refunds realized and directly attributable offsetting costs for variable incentive compensation and growth investments. Gross profit, defined as sales less cost of sales, was $1.306 billion, or 33.0% of net sales, in thesecond quarter of 2026 compared to $1.067 billion, or 27.0% of net sales, in thesecond quarter of 2025. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $28.7 million, or 0.7% of net sales, for the three months ended July 4, 2026, and $20.0 million, or 0.5% of net sales, for the three months ended June 28, 2025. Excluding these adjustments, gross profit was 33.7% of net sales for the three months ended July 4, 2026, compared to 27.5%of net sales for the three months ended June 28, 2025. The year-over-year change in gross profit as a percent of sales and adjusted gross profit as a percent of sales were primarily driven by operational cost improvement and favorable product mix, in addition to a benefit of approximately 250 basis points related to the net impact of tariff refunds realized as described above.

Current wording

Cost of Sales and Gross Profit: The Company reported cost of sales of $2.278 billion in thethird quarter of 2026 compared to $2.577 billion in thethird quarter of 2025. The year-over-year change in cost of sales was primarily driven by operational cost improvements and the net benefit related to tariff refunds realized and directly attributable offsetting costs for variable incentive compensation and growth investments. Gross profit, defined as sales less cost of sales, was $1.454 billion, or 39.0% of net sales, in thethird quarter of 2026 compared to $1.179 billion, or 31.4% of net sales, in thethird quarter of 2025. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $16.6 million, or 0.4% of net sales, for the three months ended October 3, 2026, and $8.0 million, or 0.2% of net sales, for the three months ended September 27, 2025. Excluding these adjustments, gross profit was 39.4% of net sales for the three months ended October 3, 2026, compared to 31.6%of net sales for the three months ended September 27, 2025. The year-over-year changes in gross profit as a percent of sales and adjusted gross profit as a percent of sales were primarily driven by operational cost improvements and favorable product mix, in addition to a benefit of approximately 430 basis points related to the net impact of tariff refunds realized as described above.

Previous wording

The Company reported cost of sales of $5.344 billion in the first half of 2026 compared to $5.503 billion in the first half of 2025. The year-over-year change in cost of sales was driven by the same factors discussed above that impacted the second quarter of 2026. Gross profit, defined as sales less cost of sales, was $2.463 billion, or 31.5% of net sales, in the first half of 2026 compared to $2.187 billion, or 28.4% of net sales, in the first half of 2025. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $33.9 million, or 0.5% of net sales, for the six months ended July 4, 2026, and $36.7 million, or 0.5% of net sales, for the six months ended June 28, 2025. Excluding these adjustments, gross profit was 32.0% of net sales for the six months ended July 4, 2026, compared to 28.9% of net sales for the six months ended June 28, 2025. The year-over-year change in gross profit as a percent of sales and adjusted gross profit as a percent of sales were driven by the same factors discussed above that impacted the second quarter of 2026.

Current wording

The Company reported cost of sales of $7.622 billion in the first nine months of 2026 compared to $8.079 billion in the first nine months of 2025. The year-over-year change in cost of sales was driven by the same factors discussed above that impacted the third quarter of 2026. Gross profit, defined as sales less cost of sales, was $3.917 billion, or 33.9% of net sales, in the first nine months of 2026 compared to $3.366 billion, or 29.4% of net sales, in the first nine months of 2025. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $50.5 million, or 0.5% of net sales, for the nine months ended October 3, 2026, and $44.7 million, or 0.4% of net sales, for the nine months ended September 27, 2025. Excluding these adjustments, gross profit was 34.4% of net sales for the nine months ended October 3, 2026, compared to 29.8% of net sales for the nine months ended September 27, 2025. The year-over-year changes in gross profit as a percent of sales and adjusted gross profit as a percent of sales were driven by the same factors discussed above that impacted the third quarter of 2026.

Previous wording

Selling, general and administrative: SG&A, inclusive of the provision for credit losses, was $947.9 million, or 23.9% of net sales, in thesecond quarter of 2026, compared to $873.1 million, or 22.1% of net sales, in thesecond quarter of 2025. Within SG&A, Non-GAAP adjustments totaled$3.0 million, less than 0.1% of net sales, for the three months ended July 4, 2026 and $52.6 million, or 1.3% of net sales, for the three months ended June 28, 2025. Excluding these adjustments, SG&A was 23.9% of net sales for the three months ended July 4, 2026, compared to 20.8% for the three months ended June 28, 2025. The year-over-year change in SG&A as a percent of sales and adjusted SG&A as a percent of sales were primarily driven by incremental variable incentive compensation costs and growth investments directly attributable to the tariff refunds realized.

Current wording

Selling, general and administrative: SG&A, inclusive of the provision for credit losses, was $904.5 million, or 24.2% of net sales, in thethird quarter of 2026, compared to $791.0 million, or 21.1% of net sales, in thethird quarter of 2025. Within SG&A, Non-GAAP adjustments totaled$2.8 million, or less than 0.1% of net sales, for the three months ended October 3, 2026 and $4.1 million, or 0.1% of net sales, for the three months ended September 27, 2025. Excluding these adjustments, SG&A was 24.2% of net sales for the three months ended October 3, 2026, compared to 21.0% of net sales for the three months ended September 27, 2025. The year-over-year changes in SG&A as a percent of sales and adjusted SG&A as a percent of sales include incre mental costs and inves tments tied to the tariff refunds realized.

Previous wording

SG&A, inclusive of the provision for credit losses, was $1.832 billion, or 23.5% of net sales, in the first half of 2026, compared to $1.740 billion, or 22.6% of net sales, in the first half of 2025. Within SG&A, Non-GAAP adjustments totaled $10.7 million, or 0.2% of net sales, for the six months ended July 4, 2026 and $74.6 million, or 0.9% of net sales, for the six months ended June 28, 2025. Excluding these adjustments, SG&A was 23.3% of net sales for the six months ended July 4, 2026, compared to 21.7% for the six months ended June 28, 2025. The year-over-year change in SG&A as a percent of sales and adjusted SG&A as a percent of sales were driven by the same factors discussed above that impacted the second quarter of 2026.

Current wording

SG&A, inclusive of the provision for credit losses, was $2.736 billion, or 23.7% of net sales, in the first nine months of 2026, compared to $2.531 billion, or 22.1% of net sales, in the first nine months of 2025. Within SG&A, Non-GAAP adjustments totaled $13.5 million, or 0.1% of net sales, for the nine months ended October 3, 2026 and $78.7 million, or 0.7% of net sales, for the nine months ended September 27, 2025. Excluding these adjustments, SG&A was 23.6% of net sales for the nine months ended October 3, 2026, compared to 21.4% of net sales for the nine months ended September 27, 2025. The year-over-year changes in SG&A as a percent of sales and adjusted SG&A as a percent of sales include incre mental costs and inves tments tied to the tariff refunds realized.

Previous wording

Distribution center costs (i.e. warehousing and fulfillment facility and associated labor costs) are classified within SG&A. This classification may differ from other companies who may report such expenses within cost of sales. Due to diversity in practice, to the extent the classification of these distribution costs differs from other companies, the Company’s gross margins may not be comparable. Such distribution costs classified in SG&A amounted to $140.5 million and $276.4 million for the three and six months ended July 4, 2026, respectively, and $131.1 million and $260.1 million for the three and six months ended June 28, 2025, respectively.

Current wording

Distribution center costs (i.e. warehousing and fulfillment facility and associated labor costs) are classified within SG&A. This classification may differ from other companies who may report such expenses within cost of sales. Due to diversity in practice, to the extent the classification of these distribution costs differs from other companies, the Company’s gross margins may not be comparable. Such distribution costs classified in SG&A amounted to $138.1 million and $414.5 million for the three and nine months ended October 3, 2026, respectively, and $130.3 million and $390.4 million for the three and nine months ended September 27, 2025, respectively.

Previous wording

Other, net: Other, net totaled $52.9 million and $67.7 million in the second quarter of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, Other, net totaled $52.6 million and $76.1 million in the second quarter of 2026 and 2025, respectively. The year-over-year decrease in Other, net, both inclusive and exclusive of Non-GAAP adjustments, is primarily driven by lower intangible amortization expense in 2026 and positive impacts from foreign currency.

Current wording

Other, net: Other, net totaled $64.3 million and $72.2 million in the third quarter of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, Other, net totaled $64.0 million and $67.9 million in the third quarter of 2026 and 2025, respectively. The year-over-year decrease in Other, net, both inclusive and exclusive of Non-GAAP adjustments, is primarily driven by lower intangible amortization expense in 2026.

Previous wording

Other, net totaled $94.8 million and $115.2 million in the first half of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, Other, net totaled $97.1 million and $132.3 million for the first six months of 2026 and 2025, respectively. The year-over-year decrease in Other, net, both inclusive and exclusive of Non-GAAP adjustments, is primarily driven by lower intangible amortization expense in 2026 and positive impacts from foreign currency.

Current wording

Other, net totaled $159.1 million and $187.4 million in the first nine months of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, Other, net totaled $161.1 million and $200.2 million for the first nine months of 2026 and 2025, respectively. The year-over-year decrease in Other, net, both inclusive and exclusive of Non-GAAP adjustments, is primarily driven by lower intangible amortization expense and impacts from foreign currency in 2026.

Previous wording

(Gain) Loss on Sales of Businesses: During the first half of 2026, the Company reported a net pre-tax gain of $270.6 million, driven by a pre-tax gain of $276.7 million from the CAM business divestiture, which was partially offset by a pre-tax loss of $6.1 million related to the divestitures of two small businesses in the Tools & Outdoor segment.

Current wording

During the first nine months of 2026, the Company reported a net pre-tax gain of $250.2 million, driven by a pre-tax gain of $276.7 million from the CAM business divestiture, which was partially offset by a pre-tax loss of $20.3 million related to the sale of a small business in the Engineered Fastening segment and a pre-tax loss of $6.2 million related to the divestitures of two small businesses in the Tools & Outdoor segment.

Previous wording

During the first half of 2025, the Company reported a pre-tax loss of $0.3 million related to the divestiture of a small business in the Engineered Fastening segment.

Current wording

During the first nine months of 2025, the Company reported a pre-tax loss of $0.3 million related to the divestiture of a small business in the Engineered Fastening segment.

Previous wording

Asset Impairment Charges: During the three and six months ended July 4, 2026, the Company recorded a pre-tax impairment charge of $5.3 million and $28.0 million, respectively, related to the write-down of assets associated with the exit of a Tools and Outdoor product line and related plant closure.

Current wording

Asset Impairment Charges: During the three months ended October 3, 2026, the Company recorded a pre-tax impairment charge of $19.7 million related to the Excel business to adjust the carrying amount of Excel’s long-lived assets to its estimated fair value less selling costs. During the nine months ended October 3, 2026, the Company recorded pre-tax impairment charges of $47.7 million related to the previously discussed impairment of the Excel business and a write-down of assets associated with the exit of a Tools and Outdoor product line and related plant closure.

Previous wording

Interest, net: Net interest expense was $59.3 million in the second quarter of 2026 and $80.2 million in the second quarter of 2025. On a year-to-date basis, net interest expense was $135.2 million in 2026 and $157.4 million in 2025.The year-over-year decreases were primarily driven by lower interest expense due to lower debt balances partially offset by lower interest income.

Current wording

Interest, net: Net interest expense was $56.9 million in the third quarter of 2026 and $79.1 million in the third quarter of 2025. On a year-to-date basis, net interest expense was $192.1 million in 2026 and $236.5 million in 2025. The year-over-year decreases were primarily driven by lower interest expense due to lower debt balances partially offset by lower interest income.

Previous wording

Income Taxes: For the three and six months ended July 4, 2026, the Company recognized income tax expense of $147.7 million and $172.9 million, respectively, resulting in effective tax rates of 29.6% for both periods. These effective tax rates for the three and six months ended July 4, 2026 differ from the U.S. statutory tax rate of 21% primarily due to the tax effect of certain basis differences associated with the CAM divestiture for which no corresponding tax benefit was recognized and non-deductible expenses, partially offset by the remeasurement of uncertain tax positions. Excluding the tax effect on Non-GAAP adjustments for the three and six months ended July 4, 2026, the Company recognized income tax expense of $42.0 million and $85.6 million, respectively, resulting in effective tax rates of 15.1% and 19.3%, respectively. These effective tax rates for the three and six months ended July 4, 2026 differ from the U.S. statutory tax rate of 21% primarily due to the remeasurement of uncertain tax positions, partially offset by non-deductible expenses.

Current wording

Income Taxes: For the three and nine months ended October 3, 2026, the Company recognized income tax expense of $86.1 million and $259.0 million, respectively, resulting in effective tax rates of 24.0% and 27.5%, respectively. The effective tax rate for the three months ended October 3, 2026 differs from the U.S. statutory tax rate of 21% primarily due to non-deductible expenses, partially offset by tax credits. The effective tax rate for the nine months ended October 3, 2026 differs from the U.S. statutory tax rate of 21% primarily due to the tax effect of certain basis differences associated with the CAM divestiture for which no corresponding tax benefit was recognized in addition to the items discussed above that impacted the third quarter of 2026. Excluding the tax effect on Non-GAAP adjustments for the three and nine months ended October 3, 2026, the Company recognized income tax expense of $104.1 million and $189.7 million, respectively, resulting in effective tax rates of 23.3% and 21.3%, respectively. These effective tax rates for the three and nine months ended October 3, 2026 differ from the U.S. statutory tax rate of 21% primarily due to non-deductible expenses, partially offset by tax credits.

Previous wording

For the three and six months ended June 28, 2025, the Company recognized an income tax benefit of $75.2 million and $38.0 million, respectively, resulting in effective tax rates of (281.6)% and (24.6)%, respectively. Excluding the tax effect on Non-GAAP adjustments for the three and six months ended June 28, 2025, the Company recognized an income tax benefit of $53.4 million and $8.7 million, respectively, resulting in effective tax rates of (48.7)% and (3.2)%, respectively. These effective tax rates for the three and six months ended June 28, 2025 differ from the U.S. statutory tax rate of 21% primarily due to the remeasurement of uncertain tax positions, partially offset by non-deductible expenses.

Current wording

Non-GAAP adjustments for the three and nine months ended September 27, 2025, the Company recognized income tax expense of $35.5 million and $26.8 million, respectively, resulting in effective tax rates of 14.0% and 5.1%, respectively. These effective tax rates for the three and nine months ended September 27, 2025 differ from the U.S. statutory tax rate of 21% primarily due to the remeasurement of uncertain tax positions, partially offset by non-deductible expenses.

Previous wording

The Company has performed an assessment of the potential impact to its income taxes as a result of Pillar Two. The assessment of the potential impact is based on the most recent tax filings, country-by-country reporting, and financial statements of affected subsidiaries. Based on results of the assessment, the Company believes it can avail itself of the transitional safe harbor rules in most jurisdictions in which the Company operates. There are, however, a limited number of jurisdictions where the transitional safe harbor relief does not apply. The Pillar Two tax impact from these jurisdictions is expected to be immaterial to the Company's 2026 estimated annual tax rate. The Company continues to assess the potential impact of Pillar Two, including the SbS system, and monitor developments in legislation, regulation, and interpretive guidance in these areas.

Current wording

The Company has performed an assessment of the potential impact to its income taxes as a result of Pillar Two. The assessment of the potential impact is based on the most recent tax filings, country-by-country reporting, enactment of SbS into local law, and financial statements of affected subsidiaries. Based on the result of the assessment, the Pillar Two tax impact is expected to be immaterial to the Company's 2026 estimated annual tax rate. The Company continues to assess the potential impact of Pillar Two, including the SbS system, and monitor developments in legislation, regulation, and interpretive guidance in these areas.

Previous wording

Tools & Outdoor net sales increased$102.9 million, or 3.0%, in thesecond quarter of 2026 compared to the second quarter of 2025 as a 3% increase in volume and a 1% increase from foreign currency were partially offset by a 1% decrease from strategic outdoor product line transitions. Organic revenue increased 3%, primarily driven by power tools strength in U.S. retail and commercial and industrial ("C&I") channels. Total revenue increased 3% in North America, remained flat in Europe, and increased 8% in the rest of the world. Excluding the impact from foreign currency andstrategic outdoor product line transitions, organic revenue increased 4% in North America, decreased 2% in Europe, and increased 3% in the rest of the world.

Current wording

Tools & Outdoor net sales increased$80.6 million, or 2%, in thethird quarter of 2026 compared to the third quarter of 2025 as a 7% increase in volume was partially offset by a 3% decrease in price and a 2% decrease from strategic outdoor product line transitions. Organic revenue increased 4%, primarily driven by power tools, as well as strength in the U.S. retail and commercial and industrial ("C&I") channels. Total revenue increased 3% in North America, decreased 1% in Europe, and increased 2% in the rest of the world. Excluding the impact from foreign currency andstrategic outdoor product line transitions, organic revenue increased 6% in North America, increased 1% in Europe, and decreased 1% in the rest of the world.

Previous wording

Tools & Outdoor net sales increased $157.6 million, or 2%, in the first half of 2026 compared to the first half of 2025 as a 2% increase in price and a 2% increase from foreign currency were partially offset by a 1% decrease in volume and a 1% decrease from strategic outdoor product line transitions. Tools & Outdoor organic revenues increased 1% primarily driven by power tools strength in U.S. retail and C&I channels and strong performance in prioritized international markets. Total revenue increased 1%, 5%, and 7% in North America, Europe and the rest of the world, respectively. Excluding the impact from foreign currency and strategic outdoor product line transitions, organic revenue increased 1% in North America, decreased 1% in Europe, and increased 2% in the rest of the world.

Current wording

Tools & Outdoor net sales increased $238.2 million, or 2%, in the first nine months of 2026 compared to the first nine months of 2025 as a 2% increase in volume and a 1% increase from foreign currency were partially offset by a 1% decrease from strategic outdoor product line transitions. Tools & Outdoor organic revenues increased 2% primarily driven by power tools, as well as strength in the U.S. retail and C&I channels and strong performance in prioritized international markets. Total revenue increased 2%, 3%, and 5% in North America, Europe, and the rest of the world, respectively. Excluding the impact from foreign currency and strategic outdoor product line transitions, organic revenue increased 3% in North America, remained flat in Europe, and increased 1% in the rest of the world.

Previous wording

Tools & Outdoor segment profit for the second quarter of 2026 was $389.0 million, or 10.9% of net sales, compared to $238.1 million, or 6.9% of net sales, in the second quarter of 2025. Excluding Non-GAAP adjustments, which primarily related to charges associated with footprint actionsin both periods anda voluntary retirement program in 2025, of $30.5 million, or 0.9% of net sales, in the three months ended July 4, 2026, and $38.4 million, or 1.1% of net sales, for the three months ended June 28, 2025, segment profit was 11.8% of net sales in the second quarter of 2026 and 8.0% of net sales in the second quarter of 2025. The year-over-year change in segment profit as a percent of sales and adjusted segment profit as a percent of sales were primarily driven by net productivity gains and favorable product mix, as well as a net benefit of approximately 150 basis points related to tariff refunds and directly attributable offsetting costs for variable incentive compensation and growth investments.

Current wording

Tools & Outdoor segment profit for the third quarter of 2026 was $568.7 million, or 17.0% of net sales, compared to $383.2 million, or 11.8% of net sales, in the third quarter of 2025. Excluding Non-GAAP adjustments, which primarily related to charges associated with footprint actions in both periods, of $18.2 million, or 0.6%of net sales, in the three months ended October 3, 2026, and $6.8 million, or 0.2% of net sales, for the three months ended September 27, 2025, segment profit was 17.6% of net sales in the third quarter of 2026 and 12.0% of net sales in the third quarter of 2025. The year-over-year changes in segment profit as a percent of sales and adjusted segment profit as a percent of sales were primarily driven by net productivity gains and favorable product mix, as well as a net benefit of approximately 430 basis points related to tariff refunds and directly attributable offsetting costs for variable incentive compensation and growth investments.

Previous wording

Tools & Outdoor segment profit for the first half of 2026 was $665.0 million, or 9.6% of net sales, compared to $527.3 million, or 7.8% of net sales, in the first half of 2025. Excluding Non-GAAP adjustments, which related to the same factors discussed above that impacted the second quarter of 2026 and 2025, of $43.1 million, or 0.7% of net sales, in the first half of 2026, and $63.4 million, or 1.0% of net sales, in the first half of 2025, segment profit was 10.3% of net sales in the first half of 2026 and 8.8% of net sales in the first half of 2025. The year-over-year changes in segment profit as a percent of sales were driven by the same factors discussed above that impacted the second quarter of 2026.

Current wording

Tools & Outdoor segment profit for the first nine months of 2026 was $1,233.7 million, or 12.1% of net sales, compared to $910.5 million, or 9.1% of net sales, in the first nine months of 2025. Excluding Non-GAAP adjustments, which primarily related to charges associated with footprint actions in both periods and a voluntary retirement program in 2025, of $61.3 million, or 0.6% of net sales, in the first nine months of 2026, and $70.2 million, or 0.7% of net sales, in the first nine months of 2025, segment profit was 12.7% of net sales in the first nine months of 2026 and 9.8% of net sales in the first nine months of 2025. The year-over-year changes in segment profit as a percent of sales and adjusted segment profit as a percent of sales were driven by the same factors discussed above that impacted the third quarter of 2026.

Previous wording

Engineered Fastening net sales decreased $40.3 million, or 4%, in the first half of 2026 compared to the first half of 2025, as a 10% decrease from the CAM business divestiture was partially offset by a 4% increase in volume, a 1% increase in price, and a 1% increase from foreign currency. Engineered Fastening organic revenues increased 5% driven by robust aerospace growth in the first quarter of 2026 and continued automotive fasteners growth.

Current wording

Engineered Fastening net sales decreased $145.3 million, or 10%, in the first nine months of 2026 compared to the first nine months of 2025, as a 15% decrease from the CAM business divestiture was partially offset by a 3% increase in volume, a 1% increase in price, and a 1% increase from foreign currency. Engineered Fastening organic revenues increased 4% driven by robust aerospace growth in the first quarter of 2026 and industrial strength.

Previous wording

Engineered Fastening segment profit for the second quarter of 2026 totaled $51.6 million, or 13.0% of net sales, compared to $35.0 million, or 7.2% of net sales, in the corresponding 2025 period. Non-GAAP adjustments totaled $0.1 million, or less than 0.1% of net sales, in the second quarter of 2026, and $17.3 million, or 3.6% of net sales, in the second quarter of 2025, which primarily related to costs associated with the supply chain tran sformation anda voluntary retirement program. Excluding these Non-GAAP adjustments, segment profit amounted to 13.0% of net sales in the second quarter of 2026 compared to 10.8% of net sales in the second quarter of 2025. The year-over-year change in segment profit as a percent of sales and adjusted segment profit as a percent of sales were driven by net productivity improvements, favorable automotive volume and mix, and a net benefit of approximately 50 basis points related to tariff refunds and directly attributable offsetting variable incentive compensation costs.

Current wording

Engineered Fastening segment profit for the third quarter of 2026 totaled $46.1 million, or 11.7% of net sales, compared to $59.8 million, or 11.9% of net sales, in the corresponding 2025 period. Non-GAAP adjustments totaled $0.3 million, or less than 0.1% of net sales, in the third quarter of 2026, and $4.1 million, or 0.9% of net sales, in the third quarter of 2025, which primarily related to the supply chain transformation in 2025. Excluding these Non-GAAP adjustments, segment profit amounted to 11.7% of net sales in the third quarter of 2026 compared to 12.8% of net sales in the third quarter of 2025. The year-over-year changes in segment profit as a percent of sales and adjusted segment profit as a percent of sales were impacted by automotive demand pressure.

Previous wording

Engineered Fastening segment profit for the first half of 2026 totaled $112.5 million, or 12.4% of net sales, compared to $74.0 million, or 7.8% of net sales, in the corresponding 2025 period. Excluding Non-GAAP adjustments of $0.3 million, or less than 0.1% of net sales, in the first half of 2026, and $25.0 million, or 2.6% of net sales, in the first half of 2025, which relate to the same factors discussed above that impacted the second quarter of 2025, segment profit amounted to 12.4% of net sales in the first half of 2026 compared to 10.4% of net sales in the first half of 2025. The year-over-year changes in segment profit as a percent of sales and adjusted segment profit as a percent of sales were driven by the same factors discussed above that impacted the second quarter of 2026, as well as improved profitability in aerospace in the first quarter of 2026.

Current wording

Engineered Fastening segment profit for the first nine months of 2026 totaled $158.6 million, or 12.2% of net sales, compared to $133.8 million, or 9.2% of net sales, in the corresponding 2025 period. Excluding Non-GAAP adjustments of $0.6 million, or less than 0.1% of net sales, in the first nine months of 2026, and $29.1 million, or 2.1% of net sales, in the first nine months of 2025, which related to a voluntary retirement program and costs associated with the supply chain transformation in 2025, segment profit amounted to 12.2% of net sales in the first nine months of 2026 compared to 11.3% of net sales in the first nine months of 2025. The year-over-year changes in segment profit as a percent of sales and adjusted segment profit as a percent of sales were driven by improved profitability in aerospace in the first quarter of 2026 and favorable product mix.

Previous wording

Corporate overhead amounted to $82.7 million and $79.7 million in the second quarter of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, which primarily related to a voluntary retirement program and transition services costs related to previously divested businesses, the corporate overhead element of SG&A was $81.6 million and $62.8 million for the three months ended July 4, 2026 and June 28, 2025, respectively. The year-over-year increase was primarily driven by variable incentive compensation costs directly attributable to the tariff refund realized in the second quarter of 2026.

Current wording

Corporate overhead amounted to $65.8 million and $54.9 million in the third quarter of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, which primarily consisted of transition services costs related to previously divested businesses in both periods, the corporate overhead element of SG&A was $64.9 million and $53.7 million for the three months ended October 3, 2026 and September 27, 2025, respectively. These year-over-year increases were primarily driven by variable incentive compensation costs directly attributable to the tariff refunds realized in the third quarter of 2026.

Previous wording

On a year-to-date basis, corporate overhead amounted to $146.3 million and $154.1 million in the first half of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, which related to the same factors discussed above that impacted the second quarter of 2026 and 2025, the corporate overhead element of SG&A was $145.1 million and $131.2 million in the first half of 2026 and 2025, respectively. The year-over-year increase was primarily driven by the same factor discussed above that impacted the second quarter of 2026.

Current wording

On a year-to-date basis, corporate overhead amounted to $212.1 million and $209.0 million in the first nine months of 2026 and 2025, respectively. Excluding Non-GAAP adjustments, which primarily related to transition services costs related to previously divested businesses in both periods and a voluntary retirement plan in 2025, the corporate overhead element of SG&A was $210.0 million and $184.9 million in the first nine months of 2026 and 2025, respectively. These year-over-year increases were primarily driven by the same factor discussed above that impacted the third quarter of 2026.

Previous wording

For the three and six months ended July 4, 2026, the Company recognized net restructuring charges of $15.1 million and $60.0 million, respectively, related to severance costs primarily associated with reorganizations of the Company’s supply chain resources and plant closures, as well as facility exit costs. The Company expects to achieve annual net cost savings of approximately $120 million by the end of 2027 related to the restructuring costs incurred during the six months ended July 4, 2026. The majority of the $45.0 million of reserves remaining as of July 4, 2026 is expected to be utilized within the next twelve months.

Current wording

For the three and nine months ended October 3, 2026, the Company recognized net restructuring charges of $29.5 million and $89.5 million, respectively, related to severance costs primarily associated with reorganizations of the Company’s supply chain resources and plant closures, as well as facility exit costs. The Company expects to achieve annual net cost savings of approximately $150 million by the end of 2027 related to the restructuring costs incurred during the nine months ended October 3, 2026. The majority of the $39.0 million of reserves remaining as of October 3, 2026 is expected to be utilized within the next twelve months.

Previous wording

The $60.0 million of net restructuring charges for the six months ended July 4, 2026 includes: $50.0 million in the Tools & Outdoor segment; $6.5 million in the Engineered Fastening segment; and $3.5 million in Corporate.

Current wording

The $89.5 million of net restructuring charges for the nine months ended October 3, 2026 includes: $76.5 million in the Tools & Outdoor segment; $8.5 million in the Engineered Fastening segment; and $4.5 million in Corporate.

Previous wording

The $15.1 million of net restructuring charges for the three months ended July 4, 2026 includes: $14.4 million of charges in the Tools & Outdoor segment; $1.0 million of net reversals in the Engineered Fastening segment; and $1.7 million of charges in Corporate.

Current wording

The $29.5 million of net restructuring charges for the three months ended October 3, 2026 includes: $26.5 million in the Tools & Outdoor segment; $2.0 million in the Engineered Fastening segment; and $1.0 million in Corporate.

Previous wording

The anticipated annual net cost savings of approximately $120 million related to the 2026 restructuring actions include: $103 million in the Tools & Outdoor segment; $9 million in the Engineered Fastening segment; and $8 million in Corporate.

Current wording

The anticipated annual net cost savings of approximately $150 million related to the 2026 restructuring actions include: $130 million in the Tools & Outdoor segment; $10 million in the Engineered Fastening segment; and $10 million in Corporate.

Previous wording

On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). The ruling did not address potential refunds. The U.S. Court of International Trade (“CIT”) ordered the U.S. Customs and Border Protection (“CBP”) to refund the collected IEEPA tariffs. On April 20, 2026, the CBP launched the Consolidated Administration and Processing of Entries (CAPE) system for IEEPA refunds, which the CBP continues to implement through a phased approach. The Company has submitted claims relating to Phase 1 and Phase 2 of the CAPE tariff refund process. During the three months ended July 4, 2026, the Company recognized a pre-tax gain of $118 million in cost of sales related to Phase 1 IEEPA tariff refunds realized, which was partially offset by directly attributable costs for variable incentive compensation and growth investments impacting cost of sales and selling, general, and administrative ("SG&A") expenses totaling approximately $83 million, and related tax effects approximating the Company’s marginal tax rate. The Company expects this pre-tax gain to be further offset by additional growth investments deployed in the third and fourth quarters of 2026. There can be no guarantee that additional refunds in excess of the amounts realized in the second quarter of 2026 will be received or that the ultimate amount of refunds received will equal the full amount of IEEPA tariffs paid. Furthermore, any future refund amounts realized will most likely result in additional obligations to the Company, including variable incentive compensation and taxes, and may be utilized to support incremental growth investments. Refunds may also be subject to further legal, regulatory, or administration developments. Following the U.S. Supreme Court's decision, the U.S. administration announced temporary tariffs under Section 122 of the Trade Act of 1974 (“Section 122 tariffs”), which expired on July 24, 2026. In July 2026, the U.S. administration announced plans to implement additional tariffs under Section 301 of the Trade Act of 1974 (“Section 301 tariffs”) and could take action to implement additional tariffs in the future. The Company will continue to monitor and evaluate developments on tariff policy and the ongoing phased refund process related to IEEPA tariffs as new information becomes available.

Current wording

On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). The ruling did not address potential refunds. The U.S. Court of International Trade (“CIT”) ordered the U.S. Customs and Border Protection (“CBP”) to refund the collected IEEPA tariffs. On April 20, 2026, the CBP launched the Consolidated Administration and Processing of Entries (CAPE) system for IEEPA refunds, which the CBP continues to implement through a phased approach. The Company has submitted claims within the CAPE system and separately through the CBP seeking refunds of previously paid IEEPA tariffs. During the three and nine months ended October 3, 2026, the Company recognized a pre-tax gain of approximately $181 million and $299 million, respectively, in cost of sales related to IEEPA tariff refunds realized, which were partially offset by directly attributable costs for variable incentive compensation and growth investments impacting gross profit and selling, general, and administrative ("SG&A") expenses totaling approximately $48 million and $132 million for the three and nine months ended October 3, 2026, respectively, and related tax effects approximating the Company’s marginal tax rate. The Company expects the pre-tax gains recognized in the second and third quarters of 2026 to be further offset by additional growth investments deployed in the fourth quarter of 2026. There can be no guarantee that additional refunds in excess of the amounts realized through the third quarter of 2026 will be received or that the ultimate amount of refunds received will equal the full amount of IEEPA tariffs paid. Furthermore, any future refund amounts realized will most likely result in additional obligations to the Company, including variable incentive compensation and taxes, and may also be utilized to support incremental growth investments. Refunds may also be subject to further legal, regulatory, or administration developments. Following the U.S. Supreme Court's decision, the U.S. administration announced temporary tariffs under Section 122 of the Trade Act of 1974 (“Section 122 tariffs”), which expired on July 24, 2026, and additional tariffs under Section 301 of the Trade Act of 1974 (“Section 301 tariffs”) were subsequently implemented. The Company will continue to monitor and evaluate developments on tariff policy and the ongoing phased refund process related to IEEPA tariffs as new information becomes available.

Previous wording

This discussion of certain guidance is intended to provide broad insight into the Company's near-term earnings and cash flow generation prospects. The Company is updating its guidance for 2026 diluted earnings per share on a GAAP basis to be in the range of $4.60 to $5.45, revised from $4.15 to $5.35. The Company is also updating its guidance for diluted earnings per share excluding Non-GAAP adjustments to be in the range of $5.20 to $5.80, revised from $4.90 to $5.70. These revised diluted earnings per share ranges on a GAAP basis and excluding Non-GAAP adjustments represent year-over-year growth of 90% and 18%, respectively, at the midpoint of each range as compared to 2025 performance. The Company is now targeting free cash flow to be in the range of $600 to $800 million, revised from $500 to $700 million, which incorporates the tariff refund realized in the second quarter of 2026 and projected taxes and fees associated with the CAM divestiture.

Current wording

This discussion of certain guidance is intended to provide broad insight into the Company's near-term earnings and cash flow generation prospects. The Company is updating its guidance for 2026 diluted earnings per share on a GAAP basis to be in the range of $5.45 to $5.85, revised from $4.60 to $5.45. The Company is also updating its guidance for diluted earnings per share excluding Non-GAAP adjustments to be in the range of $5.95 to $6.25, revised from $5.20 to $5.80. These revised diluted earnings per share ranges on a GAAP basis and excluding Non-GAAP adjustments represent year-over-year growth of 113% and 31%, respectively, at the midpoint of each range as compared to 2025 performance. The Company is now targeting free cash flow to be in the range of $1.0 billion to $1.2 billion, revised from $600 million to $800 million, which incorporates the tariff refunds realized through the third quarter of 2026 and projected taxes and fees associated with the CAM divestiture.

Previous wording

The above guidance ranges exclude the results of the CAM business as of April 6, 2026, and the impacts of any potential future tariff refunds. Furthermore, the above guidance ranges assume that the temporary tariff tailwind in 2026 driven by the ruling on IEEPA tariffs, which were at higher levels than the Section 122 tariffs that replaced them through late July, will be offset by higher inflation, primarily driven by battery metals, tungsten, and oil derivatives. The revised full year guidance ranges also assume that the recently announced Section 301 tariffs, as well as additional tariffs expected under Section 301, will approximate IEEPA-equivalent levels.

Current wording

The above guidance ranges exclude the results of the CAM business as of April 6, 2026, and the impacts of any potential future tariff refunds. Furthermore, the above guidance ranges assume that the temporary tariff tailwind in 2026 driven by the ruling on IEEPA tariffs, which were at higher levels than the subsequent Section 122 and Section 301 tariffs that were intended to replace them, will be offset by higher inflation. The revised full year guidance ranges also assume that any additional tariffs levied under Section 301 will not occur until late in the year, and therefore are not expected to have a significant impact in 2026.

Previous wording

The difference between the guidance for 2026 diluted earnings per share on a GAAP basis and diluted earnings per share excluding Non-GAAP adjustments is approximately $0.35 to $0.60, consisting primarily of charges related to footprint actions and other cost actions, largely offset by the gain on the sale of the CAM business.

Current wording

The difference between the guidance for 2026 diluted earnings per share on a GAAP basis and diluted earnings per share excluding Non-GAAP adjustments is approximately $0.40 to $0.50, consisting primarily of charges related to footprint actions and other cost actions, largely offset by the gain on the sale of the CAM business and related tax impact.