All right. Well, thank you everybody for being here. Super excited to have Stanley Black & Decker with us today. We have Pat Hallinan, CFO, Dennis Lange from VP of IR. You know, thank you both for being here. Well, thanks for having us. You know, I guess maybe kind of starting on the restructuring program and that journey. You know, we've got the gross margins gone from a top of 20% to about 30% today. You know, how is the company able to run ahead of schedule on that program, you know, despite industry and your volumes coming in below what we would've expected? Yeah ... two years ago? Yeah. You know, getting back to margin and balance sheet health are our top two priorities. They remain our top two priorities, and so, to your point, we haven't had the macro tailwinds, nor have we had, you know, other than some significant ocean freight deflation last year, we haven't had meaningful deflation tailwinds either. It's really just been the collective effort of all of our teams, not just our ops and supply chain teams, attacking gross margin very maniacally. We have every confidence we get to 35% by the end of next year. We'll be in the low 30s% as we exit this year. And, you know, the horses we've been riding mostly to this point are big waves of strategic sourcing and fixed cost reduction via footprint reduction, both in our production facilities and our distribution facilities. I think for the journey that is through the end of 2025, those are still gonna be the two biggest horses. I mean, yes, there's other levers we're pulling around in plant productivity or SKU reduction, some of the early stages of product platforming, but overwhelmingly, the journey from 2022 to 2025 is mostly a sourcing and fixed cost journey. Those won't stop. I don't think 35% is necessarily an endpoint. We're gonna be pushing the organization to move beyond that, and I think, to the extent we find success moving beyond that, it's gonna be on the backs of platforming and further footprint reduction. I appreciate that. You know, as you, you know, continue to build to that 35% plus, you know, does every hundred basis points get harder than the previous, or are you setting a foundation that's, you know, maybe not making it more difficult? Well, I mean, harder in the sense that, you know, part of the very first part of the journey was consuming expensive inventory, right? So that was time, right? It doesn't get much easier than just waiting for time to pass. I would say harder only in the sense that it becomes more cross-functional, right? You can have global supply chain teams with a modest chunk of product engineering go chase strategic sourcing. You know, once you're into product platforming or very significant, you know, kind of the latter stages of footprint reduction, there's just more revenue at risk or more, you know, what is the content in a product and how competitive does it make it? We don't see the incremental difficulty increasing exponentially. I mean, it's manageable, that glide path. It just means the latter stages of our journey to thirty-five and the journey beyond thirty-five is a much more cross-functional journey than the early innings were. Appreciate that. And, you know, what kind of savings does the company need to deliver next year, on the restructuring to, you know, kind of hit that 35 exit rate? And, you know, are you guys seeing it come through the balance sheet, those savings? Yeah. I would tell you that, you know, effectively, we're piling on the savings six months before they show up in the income statement. So, you know, getting to 35% by the end of 2025 effectively means that by July of next year or sooner, we've kind of done the programmatic work, and it's kind of onto our balance sheet. And yes, we're tracking at that trend, and we'll need every bit of about $500 million next year in terms of economic savings delivered. Now, that'll be, for the most part, on our balance sheet by, like I said, you know, July or thereabout, and it'll roll off the balance sheet the back part of the year. You know, you mentioned that 35 is not the end game- ... that you guys believe that it could go something above that. You know, to get, you know, above thirty-five, does there need to be, you know, maybe changes in mix, changes in the portfolio, pricing? Like, is there other levers? No, I would say that when we're talking about gross margin, especially in the near and medium term, we're talking about it from kind of a price-cost neutral, volume-neutral environment. Obviously, on the margin, if there were mid-single digit volumes or better, that could be a helpful tailwind, but we're not betting on that, at least not for 2025. And it's not part of our recipe on our long-term gross margin journey. It would always be welcome and helpful. I think it really comes down to, can we accelerate platforming, and can we dial in our footprint best? I'd say that those are the opportunities. You know, I would say, you know, things like mix and product lines, you know, are manageable. I would say, if anything, they're manageable risks on the journey as opposed to help. Yeah. Yeah. You know, maybe on portfolio rationalization, you know, the company you know eliminated a very high number of SKUs, you know, over the last, you know, kind of year plus. You know, where do you stand today on that SKU rationalization? And, you know, did that process have any impact on company sales? ... Yeah, and for those who aren't familiar, you know, when we set out on this journey, we had to put some SKU rationalization into the mix, really, to be able to pace the footprint reduction and the strategic sourcing, 'cause those are just much more difficult journeys if you're dragging the whole tail with you. And we identified about 70-80 thousand SKUs that were tied to about $50 million of revenue, and we're through much of that journey. We're probably, you know, two-thirds, if not beyond two-thirds of that journey. We haven't really seen a big volume headwind. I mean, I think the volume headwind's been a macro dynamic, not a SKU reduction dynamic. And we're through most of that journey. I think as we go forward, further SKU rationalization will be much more on the backs of product platforming, just the kind of natural evolution of how do you do product lifecycle management and new product development in a way that is intentional on component complexity, sub-assembly complexity, or and, you know, finished SKU complexity. So, I don't, again, like, 35% gross margin is not an endpoint. I'd say the wave of SKU reduction we talked about was an enabler to footprint reduction. I think from here, it's much more about good product lifecycle management than new product development. Yeah, I mean, it's a very high percentage of SKUs to be removed and to a very low percentage of revenue or volumes to be impacted. How is the company able to do that? Was it just, you know, substituting like-for-like product? Correct. Correct, and also things that just weren't generating a lot of revenue. I mean, I would say, you know, probably something like twenty thousand of those SKUs were things like, people weren't really even actively ordering, right? It was just complexity, 'cause you end up with somewhere those components are in your system, somewhere that packaging is in your system. So, you know, part of it was we were stretching some of our smaller brands probably beyond their natural boundaries, and we needed to take, you know, a brand like Lenox that has a history in cutting tools and kind of get it back to its roots. Yeah. You know, beyond just you know, rationalizing SKUs, the company you know, even kind of predating you, has been you know, simplifying the portfolio. You know, whether it was security, oil and gas, most recently attachment tools. You know, I guess what has... You know, maybe that, you know, becoming more of a tools-focused company, you know, what has that done for you guys, and what do you think it will do for you in terms of, you know, whether it's innovation, selling efforts, you know, how does it help? Yeah, I mean, I think it just helps with deploying talent and capital, right? We're very focused around our tools and outdoor business, and then even on the industrial side of things, 'cause, you know, we sold, like, the infrastructure business to Epiroc last year, it's the industrial business is increasingly fastener-centric, or whether it's handheld or robotic equipment to insert those fasteners. And so, the business is getting much more focused. So therefore, the money we invest to understand end markets or to deploy talent or capital against those end markets is much more focused. I think on the margin, you know, we're always assessing what are the assets in our portfolio that have the best strategic fit for long-term growth and margins. You know, relative to, we still have some work to do on our balance sheet. I think you'll still see some refinement of the portfolio, but I think it's, it's much more likely to be modestly sized things that just further accentuate strategic focus and help get our balance sheet to... We'd really like to be at, like, two, two and a half times net debt to EBITDA by the next year. That probably means something like, you know, $500 million-ish of asset sales, ideally, assuming M&A markets are hospitable to something like that. Yeah. You know, you mentioned, you know, maybe, you know, not done pruning the portfolio, you know, nothing super substantial, but, you know, in efforts to be a more streamlined company. You know, so is it fair to think that, you know, pruning will kind of remain on that industrial side, not necessarily within tools and outdoor? I think, I think there's modestly sized assets in either portfolio where there's an opportunity for that. And I think pragmatically, you know, at least in the very near term, the next one to two years as we're working the balance sheet, you know, we're just gonna have to look at strategic fit, business readiness, and M&A market hospitality for those transactions. And so I think because the M&A markets are relatively thin at this point in time, I think it could be something small from either. Yeah. Yeah. I don't think there's a clear bias towards one or the other, 'cause I think pragmatically, we're gonna have to go to where the buyers are. Yeah, that makes sense. I guess kind of on the other side of that, you know, as the balance sheet continues to improve with EBITDA ramping, helping the leverage metrics, cash generation coming through- You know, are there areas that you would like to see strategic bolt-ons or, you know, technology added, you know, when the balance sheet's in a position to do so? Yeah, I mean, I think, the places where, you know, we see the greatest avenues in our T&O business is, power tools and, handheld outdoor. If there were something, that was a good complement where we can get good synergies, that would be something, you know, that would pique our interest. I think on the industrial side, automotive and solar are big things for us. But I'd say we have a lot of work, both on our balance sheet and both on just getting our leadership teams and our managerial teams humming before we're in an acquisition mode. I don't see that as a 2025 thing for sure. Probably not even a 2026 thing, just from a human readiness, as much of a balance sheet readiness thing. Yeah. You know, I guess kind of turning back to the organic business, you know, you guys, you know, started to do more promotions, you know, over the last twelve months. Can you talk about the importance and benefits of, you know, kind of turning that back on? You know, maybe along with the marketing spend, particularly, you know, as you're trying to drive the more premium product lines, you know, the- Yeah, I mean, our business has points in times of the years around holidays where, you know, you need to be participating there from a share perspective. And during, you know, the most challenging parts of our supply chain challenges, we just didn't have the product availability. And, you know, your channel partners are really looking six plus months out for firm commitments and confidence that you're gonna be able to supply against these promotions. And so, you know, until really the back part of last year, we weren't on our front foot, and we haven't really changed. We've kind of gone back to our prior rhythms. And by this holiday cycle, we'll be kind of fully through that. The reason it's important is, you know, you need to have secondary placement, and you need to have offerings at key holiday points in time. I would say for us, we're kind of getting back to where we were, and I'd say for our channel partners and the broader industry context, I'd say the industry's kind of back to a pre-COVID dynamic on that. I don't think there's something that's stayed elevated, nor has it gone down to some different low point. I'd say it's kind of back to where it was. Yeah, I mean, you know, kind of almost intuitively, our first thought when you hear promotions, I think, okay, not good for gross margin, but you know, you guys are able to do it, obviously, to filter spend into the more premium categories. Yeah. Is that a positive trade-off for gross margin for the company? Definitely, I mean, it you know ends up being biased towards power tools and therefore it tends to be, even with the change in price point, margin accretive. It also is a way to build merchandising billboards with your channel partners, and so I think it's key to brand building as well. Yeah. You know, maybe turning to the market, Tools and Outdoor, turned positive in Q2 for the first time in two years. You know, I guess when you look at those markets, maybe separating the consumer versus the pro, you know, first on the consumer, you know, been under pressure for a while. You know, the data, particularly on goods spending, you know, doesn't seem like there's a ton of strength there. And I guess, what are you guys seeing on the consumer side? Any rate of change? Yeah, there really isn't. I mean, I'd say we welcomed our Q2 performance. It was above our expectations as well. It was really on the backs of, I think, good execution in our handheld outdoor and electrified walk-behind outdoor, in particular, in US retail, and so you had the fact that we won some product placement, we had some good innovation, we have great margins on those products, and we saw great demand. I'd say the underlying tools demand, you know, pro and consumer together, has been soft and choppy all year long, and it remains there. I mean, the pro is marginally stronger. The consumer's been pretty weak. I don't think a dynamic has changed in a meaningful way. It's kind of stayed weak. We expect lower interest rates to be helpful, but they're not helpful yet in a meaningful way, and that's probably the way it trails out all the way through the holiday season, is kind of a soft macro. I mean, we, we've had good DeWalt and in particular, good DeWalt power tools performance relative to the overall macro, and that's why when we say things like, "The pro has hung in there," we see that and feel that. But overall, the demand picture has been choppy and muted by the DIYer. And I think the interest rates, we're starting to see interest rates have an effect on housing, but it's the early days of that, and I think it's gonna take till sometime in the first half to see interest rates really change the construction picture broadly. Yeah, I mean, I guess, is that what you would tell people to look at, the construction picture? If we're trying to, you know, kind of think about, all right, what gets the, I guess, the pro better and what gets the consumer better, like- Yeah ... what should we be watching? I think construction activity broadly, not just residential, both commercial and residential. I think it on the commercial side, it's do you see new and existing home sales and remodeling uptick? We're starting in the earliest days now with new home sales, see the benefits of already lower mortgage rates, but it's not a groundswell yet. And then on the commercial side, it's the rate of people getting financing on commercial projects. I think those are the things to be paying attention to. Yeah. You know, you guys have talked about $300-$500 of incremental spend coming in the next, you know, I guess maybe like three-ish years. You know, I guess, where are we in this journey, and where is the spend going? Yeah. The spend's going in a few areas. It's obviously not only in our tools and outdoor business, but it's probably 6 to 7.5 of every dollar is kind of in that direction. And it's around increasing innovation, increasing field resources, both for sales and product support, and increasing brand support of our three biggest brands, DeWalt, Stanley, and Craftsman. And we're probably, you know, as we sit here today, you know, we're probably in the $250-ish deployed since we started on this journey in the early parts of 2023, the latter parts of 2022. We are protecting, we're really trying to protect that, but we're also trying to meter it out at a rate where, you know, like, for example, when you're putting resources in the field, how quickly can you train them? How quickly can they be reasonably productive? So we're not just kind of throwing the money there no matter what. It's a very thoughtful, and Chris Nelson and his team are being thoughtful of both what trades are they chasing and what geographies are they chasing, and where is the macro, you know, kind of disproportionately strong, right? You certainly have markets, you know, like Texas, which is still a very strong commercial and residential market, more so than other places. So they're just being very judicious about where they go with those dollars. But, we feel like, for the long term, we need to be investing in innovation and brand health, and we're gonna continue doing that. We'll be smart. You know, we're not gonna invest ahead of product, our ability to make it productive, and we're not gonna compromise any one year's cash flow or EPS, but we're also not gonna go into 2025 and, you know, squeeze 2025, and compromise longer term growth. Yeah. I mean, so I guess, you know, kind of following up on that, as you guys kind of toggle between, all right, is this a $300 million spend? Is it a $500 million spend? Is it just a function of, you know, where we see opportunities to get a return, or is it balance versus, okay, well, depends on where market demand is, it depends on where gross margin is? Yeah. I'd say it's governed predominantly by the rate at which we can make it productive and by the macro. So I think it kind of gets somewhere in that three to four, more closer to the five in this horizon through 2025. But not because we're trying to optimize year-end EPS or EBITDA. It's more the rate at which either our people can ramp up or our channel partners can take new things, right? Yeah. Those are more the governors on it. Yeah, I mean, you know, maybe turning to the market and the market positioning, which, you know, drives a ton of investor questions to us. You know, and from the outside looking in, it seems like it's always been a pretty competitive market, you know, selling into big box. You know, I guess, do you think competition has picked up over the last two to three years? Or, you know, maybe Dennis could give, you know, provide a longer-term view beyond you. Do you want to take it, and I can start? Yeah. Okay. Yeah, I mean, this has always been a competitive industry, particularly if you think about power tools. There's, you know, four major global players that you tend to see in most markets. A lot of them have their areas of strength. If you think about, like, you know, Europe for one player, or Asia for another, or North America, you know, in our case, and maybe one other. But I don't know that it's gotten more competitively intense. What has occurred, though, is that there are two players, DeWalt included, that really have differentiated themselves on the breadth of their systems, the amount, and the quality of the innovation that's being brought to the market, and the ability to kind of go after, you know, various channel and geography opportunities around the world. And so as you think about that, that's really not a new thing necessarily, but there definitely is an area where there are two players that are differentiating themselves maybe differently than what you would have seen in the past. Yeah. The thing I would add to that is, I don't... I haven't... You know, I'm obviously about less than two years in, I haven't noticed a big change in the dynamics, and I would tell you, like, we're in a strategic planning cycle and doing a lot of end market outreach to channel partners, to big construction companies, small construction companies, end users. And there's a true willingness to pay for productivity enhancements, safety enhancements, or durability enhancements. And while people would put DeWalt up there with the top brands, I would say that the professional user base is still looking for more on those fronts and has a willingness to pay. And so I think it's a good signal, too. If you innovate in a focused manner with the end user insight, you're gonna get paid for your innovation if it's good innovation. And I would also say, you know, we just lived through twenty-four plus months of a soft macro and inventory overhang, and we've seen pretty good pricing discipline. So I think that's kind of a healthy signal of people starting to get manufacturers being focused on innovation, brand building, in-market support, as the way to differentiate and compete, as opposed to price. Yeah. You know, I guess you know you talked about how the pro, you know, the pro wants more and will pay for more. Obviously, you know, I would, I think productivity's never been more important than it is right now, when you, you know, see what's going on with wages. Yeah. But, you know, I guess when you say they want more, like, what, you know, what do they want? Is it battery? Like, what specifically is it? Because I imagine that that's kind of where you're, you know, funneling a lot of your investment dollars. You know, there's obviously certain applications where safety resonates, but productivity and durability are the things that they thirst for. And if you can bring something to the table, whether it's product-oriented and/or field support oriented on the durability side, that is what they value more than give me the cheapest, you know, price point. 'Cause in the scheme of things, the tool cost, while it's not trivial, it's not the biggest issue they face in their job. And they can monetize productivity and durability. What about on the battery side? You know, what investments are you guys making there, or is there any opportunity you see there? ... I'll let Dennis, I mean, there's, there certainly is. What I would tell you is, battery is something we're always mindful of, and there is a switching dynamic. But, you know, I'd say increasingly, productivity and durability are stronger brand pillars than just pure battery. But that doesn't mean that there's. There's certainly being able to bring battery technology up to a greater level to take out alternative, you know, whether it's compressors, pneumatics, or other things, has certainly been an unlock for us, and a big unlock, as we have a bunch of concrete tools that we're launching this year that were at World of Concrete earlier this year. It's been a great unlock for us in increasing our TAM via battery technology. But I think it's more, how do you use battery to actually bring the other benefits that I talked about around productivity or durability, as opposed to it's purely a switching dynamic, which I think people get caught up in. Yeah, and the technology continues to get better. If you think about, like, as an example, we brought pouch that allows you to do what Pat talked about and get higher power. That, in conjunction with the engineering that takes place to optimize that battery performance, optimize the motor performance, has allowed us to go up the power curve, continue to take out, you know, higher level, larger tools, and applications. And I don't think that stops. I mean, there's new battery technologies that are gonna be applied later this year as well, that will help unlock that. It'll likely be within existing systems that you see today, but you continue to get better batteries that can unlock the types of functional attributes that Pat talked about. Yeah, maybe, you know, turning back to, you know, market positioning. You know, I think, you know... I know a year ago, two years ago, there was tons of market skepticism on the gross margin recovery. You know, I think investors are, you know, more positive there, just because you guys are delivering ahead of schedule. The biggest concern now from investors that I hear is: How can Stanley grow volumes two to three X the market when you have competitors that are just willing to just run at structurally lower margins? So how do you answer that? Yeah, we feel like, you know, if I take the DeWalt corollary, DeWalt has been, over the last 10 years, growing at about an 8% CAGR. You know, we've had five quarters in a row of low to mid-single digit growth in what we would you know, measure as a down market. And so it's certainly on our whole portfolio, because we have some brands that aren't as healthy as DeWalt, a different challenge. But I feel like, with the end market user input we're getting and the innovation engine that we have, we certainly feel like DeWalt is and can continue growing ahead of market. And then we have to improve the brand health, and innovation, and cost position of some of our other brands. You know, but we're talking about returning to mid-single digit or better growth, which was part of our past, and we think very much can be part of our future on the basis of the innovation engine that we have. And I think, you know, I think there's. If you think about the transformation, it was really designed to get us back in an environment where the macro, you know, was gonna be relatively choppy. And so that's what we've been living through, and that's what we're doing, but by no means is an endpoint. And I think as Pat, you know, and Chris have come into the business, they see lots of opportunities beyond the transformation to take, you know, the earnings power and the growth potential of the company to higher levels. Yeah, when I, you know, when people look at the growth of your tools business versus some competitors out there, even the market that's out there, you know, it does seem like you guys, you know, maybe do better with the consumer, some competitors maybe do better with the pro. You mentioned the pro maybe wanting more. Mm-hmm. You know, do you think the fact that the pro's been good and the consumer has been soft has, you know, been a headwind to your growth relative to peers or the market as a whole? I think there's probably an element of that on our total portfolio, but that's because we have some brands like Craftsman and Black & Decker in there, that could have better health and innovation, but are very susceptible to that chunk of the market, and they're pretty sizable brands for us relative to a competitor you might be referring to as a percentage of our total portfolio. But we don't think it's a structural dynamic that we have a permanent headwind in front of us. We have a very strong brand in DeWalt. It's, you know, it's roughly half our tools portfolio. We have every confidence that we beat the market with that, and we see opportunity in these other brands to really re-energize them. We probably weren't investing in them as effectively and weren't managing them as effectively as they could be managed. Yeah, maybe last one on time, but maybe last one on price. You know, I think price has generally held in a good deal better than anyone would have thought, you know, a year ago. We had excess inventory, weak demand, and prices held in. And I guess, one, why do you think that is? And then, two, you know, what is the outlook for price going forward? Yeah, I think, first of all, I'd say the pricing dynamic, we talked about a little bit earlier, pretty disciplined pricing dynamic. I think that's a few things. I think, you know, in tools broadly, it's not a huge PP&E base. It's not about, I need volume to make my PP&E productive, so chasing volume through price isn't that smart. Pricing can be really sticky, so discounting to move inventory, not that smart, and I think it's a credit to the channel partners and the manufacturers that we stayed disciplined. I don't see that changing. So, you know, we're heading into the holiday season, and there's nothing we can kind of sense out there that has really changed the pricing dynamic all that significantly. And I think, you know, you know, we're at the stage of this journey of our transformation, where we're really excited about finishing the first three years of it that we set out in 2022. We have every confidence we get to the place that we want to go to, and right now a relatively new leadership team working on the path for 2025 to 2027. And, you know, we would expect we're probably gonna have a capital markets day later this year, sometime kind of late November, mid to late November. And we feel like, as we've been saying today, you know, 35% margin is not an endpoint. We see opportunity beyond that, and we're really pivoting towards growth, and we look forward to talking more about that as we lay out 2025 and beyond. Yeah. Well, thank you. I look forward to that as well. We're up on the thirty minutes, you know, love the conversation. Really appreciate you guys- Thanks. Appreciate the time. Thank you. Thanks. Thanks, guys. Appreciate it. Thank you. All right.