By John Keilman

Stanley Black & Decker will likely raise prices and shift production around the globe if Donald Trump is elected president and levies fresh tariffs on goods coming from China, the company said.

The statements came amid the company's stock sliding 8.3% in morning trading despite posting third-quarter sales in line with analysts' forecasts and adjusted earnings that topped estimates.

Donald Allan Jr., chief executive of the Connecticut-based tool maker, said Tuesday that the company has spent months creating a plan for dealing with larger tariffs under a new Trump administration. The former president has thrown out numerous tariff ideas during his campaign, including a 60% tariff on Chinese goods, which would make for the highest trade barriers in decades.

During Stanley's third-quarter earnings call, Allan said while the potential tariff regimen remains unclear, the company would respond to new tariffs with price increases.

Stanley could also move production and parts of its supply chain out of China to other Asian countries or to Mexico, Allan said. A significant shift to the U.S. is unlikely, he said.

"It's just not cost effective to do," he said. "And there's questions about whether we even have the labor to actually do that in this country."

Stanley has spent the last two years cutting expenses in a bid to increase its profits. That has included shuttering U.S. factories and trimming the number of products it makes. The company has said it will continue reducing its plants worldwide in 2025.

In other news from the earnings call:

-- Stanley's quarterly revenue of $3.8 billion was down 5% year-over-year. The company's adjusted earnings of $1.22 per share beat Wall Street's expectation of $1.05, according to FactSet.

-- The company raised prices in its tools and outdoor segment, by far the biggest part of the business, but saw net sales decline 3% year-over-year due to weak consumer spending.

-- Stanley narrowed its full-year adjusted earnings per share outlook to $3.90 to $4.30, from $3.70 to $4.50.

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(END) Dow Jones Newswires

October 29, 2024 11:36 ET (15:36 GMT)

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