All right. Thank you, everybody. Chris Snyder, a U.S. multi-industry analyst. I'm super excited to have Stanley Black & Decker up here with me. We have CFO Pat Hallinan, Chris Capela, Director of IR, and then [Michael Worley], Vice President of IR, who just joined the company and will be replacing Dennis Lange, who many of you know, who is moving now into a strategy role with Stanley Black & Decker. Before we get into the Q&A, Pat's going to start off with some remarks. Yeah. Thanks, Chris. Good to be here. Thank you for attending this afternoon. As we have Chris Nelson, who's been our Chief Operations Officer for the last 2.5 years, stepping into the CEO role in October, and Don Allan, our current CEO, going into Executive Chair, I just want to reinforce the fact that we think we still have a great organic self-help and growth story in front of us. That's where our focus is for value creation, finishing the transformation, mitigating tariffs to get our margins to 35%+, and really pivoting the growth and doing so by a heavy emphasis on accelerating very targeted innovation and activating our brands with greater precision and greater purpose in the marketplace. Obviously, the macro environment and the political environment has given us some new fun things to work on. We still feel, despite all of that noise and tumult, that the targets we laid out a year ago at the Capital Markets Day we had last fall are very much still the appropriate targets for the business and very much still within reach. The tariffs probably put a 12-month lag to achieving those targets, but they're still the right targets for the business. We're looking forward to having Chris in the CEO role and are very confident in the road ahead. With that, Chris. Thank you. Kind of maybe starting with that Investor Day from last year, you guys talked about that you're really focusing spend on three brands. DEWALT seemed like first and foremost, but then also STANLEY and CRAFTSMAN. Can you talk about that decision, why it was made, and ultimately what benefit that brings the company? Yeah, yeah. I think a few things. One is we went through a period, as did many durables products that go to market through construction channels, whether they're retail big boxes or trade-centric channels, where a proliferation of brands maybe helped a channel exclusivity exercise. We obviously, if you followed our story for a long time, we acquired many brands, many you didn't list, and I'm not going to spend the time here listing them. The road from here forward in accessing growth is really about resonating with end users as your channel partners and not promising lots of exclusivity. Therefore, you know, having these brand boundaries is a less valuable route forward. Now we need to be able to invest to demonstrate to end users that we're giving them productivity or safety improvements or supporting them in the field better. By prioritizing brands, it enabled us to allocate capital in a much more concentrated, scalable manner. When you look at DEWALT, STANLEY, and CRAFTSMAN, you know, those brands are 75%+ of our dollar revenue to begin with. They allow us to access the three big market segments that we're targeting most specifically. DEWALT, very much targeted at pros across a number of trade channels. STANLEY, a brand that is targeted very much at the kind of sole proprietor pro. If you follow STANLEY outside the U.S., it's a very powerful brand in power tools as well as hand tools, whereas the U.S. is still a hand tools brand. CRAFTSMAN gives us the entree to DIY. There are places where we had good scale, we had good route to market, and we had good attachment to the end markets we're chasing most specifically. I appreciate that. DEWALT has had really good growth. You guys kind of have talked about that. Are you seeing improvements at STANLEY or CRAFTSMAN from the focus and the investments you're making? We are. I mean, obviously, they're not quite at the pace and magnitude of DEWALT yet. The ex-U.S. parts of our STANLEY brand were on that game probably in kind of second order relative to DEWALT. We are in Europe and Latin America seeing much greater performance from that brand, and we're going to be bringing that more to the hand tools marketplace in the U.S. Some of it's industrial design and packaging, and some of it's merchandising. Yes, we are starting to see that in the European markets. I think CRAFTSMAN is a brand where we're retooling its positioning with DIYers. It probably got a bit too broad in terms of category and product offering, and we need to focus that a little bit more. We have two big retail partners there. One, we're humming on all cylinders, and one, I think we need to do some work to retool the actual product offering and the marketing and then align strategy. I do think in 2026, you're going to see progress in both of those brands that start to read through to the top line in both of those brands. Appreciate that. You guys talked about, with the growth investment, obviously product innovation. I guess are there any specific innovations that you want to call out that are really having a material or could have a material impact on demand? The second piece you guys called out was you added more than 400 customer-facing employees. Can you just kind of talk about what they're doing to help support growth? Yeah, yeah. On innovation, I would say we have some areas of historic strength like carpentry and concrete. We've had products in both of those categories over this year and into next year. We've always had good presence in mechanical, plumbing, and electrical, but not where it needed to be. I think as you see things roll out next year, you're going to see a lot in the plumbing and mechanical and electrical spaces. I think that's where you're going to see the growth in DEWALT in those categories. In terms of resources, they're kind of equally, if not biased, a bit towards sales and then some in-field service. As we've gotten back to historic strength, which is field support of the brand, as you go to market with trade customers, whether it's a Grainger or a White Cap or whomever is a channel partner of yours, they expect you to have your own salespeople in the field with their salespeople, driving relationships with big contractors and driving sales initiatives. I'd say that's where about 2/3 or more of that headcount has gone. The rest is supporting product, customer service support, and field support of product on big job sites or with channel partners, whether we run a repair facility that's co-located with a channel partner or some of our own. I appreciate that. You mentioned that these three priority brands account for about 75% of the portfolio. The other 25%, is the investment into those three brands coming at the expense of the other 25%, or is the investment there just being kind of held steady? It's just not increasing like the others. It's the latter. We have general managers in charge of those brands, and we expect them to be much more kind of bootstrappy, entrepreneurial. For example, we're not starving LENOX to feed DEWALT. As we've talked about our transformation journey since 2022, while we were saving $2 billion, $500 million from SG&A, and $1.5 billion from COGS, we were also saying, hey, we're going to be deploying about $100 million incremental a year to growth. Those incremental dollars are going towards those three big brands. I appreciate that. Obviously, there's a lot of cyclical pressure in the market. The consumer's weak, interest rates have been high, tariffs aren't helpful. I think the investors that have a more structural negative view of Stanley would say you guys want to outgrow the market by 2x- 3x, but there are competitors in the market who are just willing to run at lower margins versus what you're targeting. I know there's more than one competitor. I know we always focus on the one. What would you say to that? Who is the company taking share from, or who do you think you could take share from? Yeah. I'd say there's three things in there, right? One is, I think, and we sometimes talk about 2x- 3x the market, and I think people get either excited or very anxious. The market we're talking about is real GDP. If you're thinking real GDP is 2%-ish ± 50 basis points, we're talking about 4% - 6%. If you look at a brand like DEWALT® that's had a CAGR over 6% for the last 10 years, we're kind of talking about performance that's within the bounds of our long-term trajectory. It's not easy, but we're not out there chasing 12% or 18% and trying to incite price competition. That is certainly not our objective. I feel that we can compete and grow this business mid-single digits in a market that's probably a 3% - 5% market. If we're growing 4%- 6%, that's probably the framework we're talking about. If we compete on the basis of innovation and the way we support our products in the field, we can do so constructively without creating lack of pricing discipline in the market. I think in terms of share, the two of us that you're mentioning together globally are each about 12%, 12.5% market share. The two of us together do not have 75% or 25% market share. There's still 75% of the market to go chase. It's not just two people tearing steak off of each other's plate. We have 75% of the market to go after. If you look at other durables markets, it's not atypical that you have 2-5 players that are of reasonably equal size and capability. Players like ourselves and the TTI brands can go to the market and compete for the other 75%, and we can compete against one another on the basis of innovation without killing one another. I do think on the where else is share coming from, there are a number of other players. Some of them are global, some of them are local, and they've been retrenching a bit for various reasons, whether they have other lines of business that are more important than power tools or whether they're going back to some of their more traditional geographic markets. I think that's kind of where the share has more than not been coming from. I also think the innovators like ourselves, and I certainly have to give TTI some credit, we're innovating for the pro and we're growing the market by growing dollar share in terms of higher-priced tools that drive higher productivity. Yeah, absolutely. You know, the company has had a strong gross margin recovery. I think the trough was about 20%. You know, I think you guys are kind of targeting low 30% in the back half. The target is 35%. It sounds like you said earlier, maybe, you know, that that's kind of out 12 months from the original year-end 2025. I think it's very reasonable that, you know, we have had a very challenged market, down volumes the whole time. Obviously, tariffs are unhelpful to that. You are also going to end the year roughly all the way through the $2 billion restructuring program. Correct. What drives that next, you know, what gets you from low 30% to mid-30%+? Is it just volumes? Is there more cost savings? A lot, a lot. If we get to the end of this year, we'll be, and this is consistent with the dialogue we had at the end of the second quarter, we'll be roughly around 31% for the full year in 2025. Obviously, we want it to be farther along than that. Tariffs have brought in about $800 million in annualized new cost. What gets us through that by the end of next year is we'll have a second price increase this fourth quarter. We'll have tariff mitigation next quarter, and then we have some additional activity in supply chain opportunities. We have every confidence we get there. The biggest, in the simplest terms, is mitigating the tariffs out of the system. Because when we look at tariffs, by this fourth quarter, we'll kind of dollar for dollar price neutralize them on a run rate. Meaning, if we have an $800 million tariff bill, we're kind of at that level of pricing, but that doesn't recover margin. The supply chain actions that we're attacking to get product out of China to elsewhere, whether that be Mexico or other Asia and a little bit North America or U.S. rather, that'll be the margin expansion of next year. Appreciate that. Maybe turning to the market, you know, it feels like the story here has been the same for the last three years. The pro is resilient and healthy. The consumer is not, is feeling pressure. I guess, are you seeing any rate of change as you look across either side of the market? No. I mean, there's been, you know, and some of these were dialogues, say there's been ebbs and flows across the months and quarters of this year in that there have been months where the POS has actually been surprisingly strong. Then there's months when the POS has been weak. It does seem like the consumer, and especially the DIY consumer or anybody buying higher price point items, you know, they kind of ebb and flow with the political moon. You know, we set out this year, we thought we'd be flat to maybe up a point. Then, you know, across the first quarter close and the second quarter close, we revised that to kind of flat to down a half a point. We still feel like we're roughly in that zip code. I do think if there could be some certainty on the tariff/pricing front, and I do think there's meaningful movement when the 10-year is getting to 4% or low versus 4.5% and up. We'll see if the current dynamic holds, right? I mean, there's a lot of noise in interest rates right now, but construction broadly, not just U.S. housing, will benefit from a 10-year that's 4% or lower. Yeah, I mean, that was kind of going to be my next follow-up. If you look at tools and outdoor volumes, you know, been down for three years, below pre-COVID levels, from my sense. I guess, is that it? Do you think it's, you know, we need rates to get it? Is it just maybe consumers need to see certainty, feel better? What could kickstart this? Yeah, I do think rates are a part of it and are a big part of it. I also think, and I'm not naive, I don't think that these things, you know, click over quickly because obviously rates ultimately will rise and fall with deficits. I also think immigration and employment policy, because that drives construction activity for sure, not just housing construction. Finally, how is the government, both local governments and federal governments, going to deal with infrastructure? We care obviously about residential construction, but commercial and infrastructure construction is as valuable to us. Yeah, absolutely. I think you guys said on the last conference call that you're seeing about one-for-one price elasticity. You know, price goes up one, volumes go down one. Is that still what you're seeing? That's still what we're seeing. You know, as we went into this tariff pricing environment, the reality is the industry hadn't taken a lot of price recently. Most of what we had to observe data-wise was our promotional elasticity, which was really, if we take price down 1%, what do we get? It was about a one for one lift. We went into a price increase environment, which was mostly a lift price increase environment, not exclusively so. That's about what we've seen. Obviously, it doesn't hold across every SKU equally, and we didn't take price equally across every SKU. There are certain categories that are more elastic and some that are less elastic. That is a good rule of thumb on average for our experience. Appreciate that. You Appreciate that. You guys very successfully, it seems like, went out to the market and got price in the spring. I know that's not an easy thing to do with the channel partners you guys have. I guess my question is, is that getting harder as time goes on? Do you feel like there's any pricing fatigue in the market? Maybe not due to the absolute level of price, but just due to the consistent every other month having to come back and ask for more? Yeah. Both very fair questions. I think on the first price increase, which we launched in the spring, middle of the second quarter, we had the good fortune of starting those dialogues early, meaning the fourth quarter of 2024, less with the, we know precisely what we're going to do and we know precisely when we're going to do it, more of we're anticipating tariffs, we're anticipating them to be significant, and we're anticipating them to stick. We need to have 35% gross margins to give you, Mr. and Mrs. Retailer, or the end consumer, innovation that you want. For almost nine months before they were activated, we had been in constant discussion and healthy give and take of how are we going to do this, how much is list price, how much is change in promotion, that kind of stuff. We got the first one in, as you mentioned, and we were probably on the early side on both tools and outdoor equipment there. I think it's a fair question on the second. We're only doing two. We might be talking about it all the time, but the way the world's experiencing it is at least this year, there will be two of them, and the second one will be in October. We still have the ground to stand on if we're not, one, we're not where we need to be from the margin journey. Two, I think now the retailers themselves are realizing that this tariff regime is for real. A lot of the prior regime they were exempted from, either in total or by category, and they're now living it. It doesn't make the discussion easy or quick, but it makes it fact-based. I have every confidence we get the next one in. I do think in our industry, power tools in particular, because we haven't been taking a lot of price, I don't want to say that means it's easy for retailers or end buyers to digest our price increases. Some other industries in pretty close adjacent spaces have been pushing that envelope even way before tariffs pretty hard. I do think some other places are seeing some price fatigue, whether it's because copper is also a force there, or whether it's an industry like HVAC, where they've been really pushing the outer boundaries for a long time. I don't know those industries all that well, but I don't sense those same dynamics in our space. When we look at the tools market, particularly the power tools market, there is a lot of imports from Asia. Some of them could be even from yourself if we look back historically. I guess the question is, do you think that you guys are in a net competitively advantaged by the tariffs, given also the North America production base? We certainly believe that that's a potential, and we're trying to make that the reality. I think it hinges on our ability to maximize USMCA achievement by product line, because then you're going to zero. We had the good fortune, which didn't seem like good fortune a couple of years or months ago, when in 2018, the last tariff regime, we probably overexpanded in Mexico. Until this tariff regime, we're wondering, do we hold on to all that capacity or not? Now we're basically moving volumes from China into that capacity. One, there's a speed because we already had the four walls. Two, it doesn't instantly become USMCA compliant. You have to do some other things to the product content-wise to get it there. We do believe if we optimize that part of our value chain, that net-net, we're advantaged from a tariff perspective. The more you develop the local supply chain in Mexico over multiple years, the more you can take inventory out of the system as well, because you're a bit more closer to market. Appreciate that. We saw in August, you know, they expanded a list of derivative products on the 232 metal tariffs. Does that have any impact? I think you guys last sized the gross tariff impact at $800 million. Is that impacted by this? Is that going to maybe be rolled up into the October price increase you talked about? It doesn't change our total number. The only reason is we did not anticipate the further 232 increases. What we had done on the second quarter outlook is anticipated that the rest of world tariffs would be higher than they turned out to be. If you recall, around that July timeframe, Vietnam had gone from 10% to 20%. We kind of just assumed everybody in the rest of the world is going to be up 5% -1 0% points. On average, those things haven't happened. We kind of overcooked our estimate on the rest of world tariffs. Then 232 went up. They roughly offset each other. Our run rate is still kind of unmitigated. Run rate is about $800 million annualized. It's just because we overestimated one and underestimated the other, but they roughly offset. I appreciate that. Maybe tying that to gross margin, you guys, obviously, there's productivity tailwinds that are boosting gross margin, but there's also kind of a lot of price coming through. To your point, that's going to be margin dilutive because it's dollar neutral. Can you just talk about that and ultimately that gross margin bridge that you guys are forecasting into the back half of the year? Yeah. I mean, we're, you know, we obviously had some serious headwinds in the second quarter because the second quarter had relatively low amounts of price. For a period, we had the Liberation Day tariff rates of 145%. You kind of had the extremes of little price and maximum tariff. We were at about, I think, 27.5% gross margin, and we'll be in the low 30% the back half of the year. A big chunk of that is price, including by the fourth quarter, some incremental price. We are going to get some mitigation into this year. We're not speaking about that publicly, but there is our ability to take SKUs we were already making in both China and Mexico, get more of those to Mexico, and also some ability to change some of the things we're doing with our Mexican SKUs to get them more USMCA compliant so we can get an acceleration of tariff mitigation. Third, we still have the transformation work that, if you've been following our story, for the most part, we generate those efficiencies. They go on our balance sheet for six months, and they come off in the fourth quarter. I'd say all three of those are contributing significantly to that fourth quarter. If you're inferring, you're going to get into the low 30% in the fourth quarter, right? Yeah. I wanted to kind of follow up on USMCA. Can you kind of update us on Stanley 's USMCA compliance? What is that process or timeline for getting compliance on a product? The USMCA is under review in 2026. Is that part of your thought process at all yet that perhaps things there could change? Yeah, I have two different questions. I mean, I think, you know, prior to tariffs, and specifically tariffs on whether it was finished goods or components from China and whether they were coming from our own facilities or a supplier, the efficiency of untapped goods from somewhere in Asia could sometimes, in a prior life, trump the ability to get to USMCA, where you might have to develop more local capability to achieve that. In the past, we weren't, it wasn't we were ignoring it. Anywhere we weren't doing it, it was because it was optimal to not do it. Obviously, 55% tariffs on China change that equation quite a bit. Each of them, in the simplistic of terms, country of origin, which drives the tariff demarcation, and USMCA have, in essence, their own rules on percentage of content. Because it's not just any dollar of content. It tends to be the content that drives the actual productivity of the tool. There are two different criteria, but in the end of ends, they tend to be close enough to percentage of content. Our mitigation path is how do we optimize both. I think you're not going to hear us speaking very loudly about the level of USMCA compliance because we feel like that's going to be a strategic advantage. We'll be guiding people by gross margin expectations, but you can be assured we're trying to push for maximum USMCA compliance. Some of that can be quick because the supply base already exists, whether it's ours or somebody else's. Some of that will take some supply chain development. I think on the notion of, hey, what happens with USMCA? I mean, I think, you know, if the last five or ten years have taught us anything, it's going to change. We're going to have nodes around the world. We won't be only Mexico dependent. We had a capability in multiple Asian countries, other Asian countries, not just Vietnam, but you can imagine we're expanding those capabilities. We also have capabilities in India we're expanding. I think you're going to see us be, and I'm going to assume, scaled, smart, durable manufacturers are going to have to be multi-nodal manufacturing. Our Asia, our China hub still services Europe, right? It's not like that capability goes away early either. You can imagine that one of the knock-on effects of taking U.S. content out of China is the rest of the world can go into China and then come out. We'll be, as best we can, a voice to preserving the current USMCA regime or something highly similar to it, but we'll have to be prepared to adapt if it changes. Appreciate that. Can you maybe talk about some of the moving parts into 2026? Obviously, the macro and volumes are difficult to call, but it feels like the company has pretty material price wrap into next year, particularly following the October action. It sounds like you expect to get, you may exit at closer to that mid-30% gross margin. You get nice margin expansion there. Anything else to call out or think about? No, I'd say we're obviously, it's dangerous to come here and start getting too over your skis on 2026. Our mindset to how we're tackling the year is we're still expecting a volatile macro and political environment, which is creating at least uncertainty. What it does to GDP, I'm not here to kind of give a 2026 GDP forecast, but I think it creates uncertainty. I think that uncertainty puts weight on end market buyers. As a company, we're just planning on, we better be able to make gross margin and cash progress if it's a low volume year. That's our mindset. We're going to be maniacal about holding on to the price, maniacal about driving the mitigation that gives us the gross margin expansion. We're going to continue to challenge ourselves to be more efficient with SG&A in the back office so that even in a low growth environment, we could pump $75 million- $100 million towards sales and marketing. That's the way we're going to position ourselves. I think as you see gross margin improve, you're going to see EBITDA and cash improve. That's the mindset going into next year. I think if somehow the world is better than that, I think if there's growth, then it's a powerful force on next year. Thank you. I appreciate that. Maybe only a couple of minutes left, maybe finishing up with some strategy ones. At the late 2024 Investor Day, you guys talked about about $500 million, if I remember correctly, of divestiture. I think you gave around 18 months as a potential timeline for that. Any update on that part of it? Yeah, we're still tracking. I mean, I think we've been in various forums reasonably direct that it's most likely an asset in our fastener business, Arrow-centric, where you can get good multiples. The time to get there has been less about waiting for the M&A market and more about us getting the profit consistency out of that business that enables us to monetize it in the best possible manner. I would tell you, I think we're out with that asset sometime in the fourth quarter or the first quarter. I appreciate that. You know, just kind of, you guys, beyond Arrow, also there's an auto fasteners, general industrial fasteners. Can you just maybe talk about what the scale of that business would be without Arrow and why it makes sense to keep some and not all? Yeah. You know, that business, we're about $15.25 billion, and that business is about $2.1 billion with Arrow in it. Arrow is probably about $400 million, right? It's still a sizable business. You're talking a $1.7-ish billion, $1.8-ish billion business. To your point, it's about 2/3 auto-centric. The remainder of the remaining 1/3 is general industrial. From our perspective, our job is always to create maximum shareholder value. We'll always challenge ourselves about the composition of the portfolio, what makes sense, what doesn't make sense. We do believe that business grows very similarly to tools. It may be more like 3% - 4% instead of 5% - 6%, but it's still a decent grower. It has the ability to innovate and grow beyond real GDP. At an EBITDA margin, it's every bit as good, if not even slightly better by a point or so than our tools business. It might have a slightly different composition of gross margin and SG&A. Maybe it's a point or two below in gross margin, but also a point or two below in SG&A kind of thing. Right now, I don't think if we monetize it, we'd somehow get paid more than 12x for it. That's not a way to create value for shareholders. We feel like we can compete to win in those businesses. That business, just like our tools business, we're just being much more intentional about the end markets we're chasing and how we're allocating organic growth dollars to chase those end markets. Thank you so much. Really enjoyed the conversation. Likewise, thank you. Appreciate it. Thank you.