Prepare to Pay More for Electric Drills and Power Saws
Stanley Black & Decker is piling on the price increases. There’s no sign of sticker shock yet, but consumers will bear the weight of supply-chain woes in a bigger way.
Demand for home-improvement products is still going strong.
Photographer: David Paul Morris/Bloomberg
Power tools are about to get a lot more expensive in the U.S.
Stanley Black & Decker Inc., which makes drills, saws and lawn mowers, already raised global prices 4% to 5% in the third quarter to try to keep up with runaway commodity and shipping costs. But the company, which reported earnings for the period on Thursday, said that it now expects to spend an extra $690 million this year on raw materials and logistics services, a substantial step up from an estimate of $460 million in July. Spot pricing for shipping containers is as much as seven times higher than what Stanley was paying earlier this year, and the average time required to ferry goods from Asian suppliers to North American facilities has stretched to 85 days from 40 in more normal times. Stanley is paying up for premium freight options to speed delivery of high-priority components and satisfy a surge in demand for home-improvement products, which is still going strong even as pandemic restrictions fade. It’s also stockpiling inventory, to the detriment of its free cash flow, which swung to the negative in the quarter.