It wasn't a surprise to see Stanley Black & Decker (NYSE: SWK) cut full-year earnings -- there's no shortage of signs of weakening consumer spending -- but the magnitude of it was a shocker. Having started the year with management forecasting adjusted EPS of $12-$12.50 (reduced to $9.50-$10.50 in April), investors are now looking at just $5-$6. The markets punish such downgrades, and the stock is down more than 48% in 2022. So what's going wrong, what questions does management have to answer, and is the stock worth buying now? 

This was supposed to be the year when Stanley built on the burgeoning DIY tools sales built up during the pandemic while integrating its acquisition of MTD (lawn mowers, snow blowers, and outdoor power equipment). Meanwhile, refocusing on its core tools and industrial (engineered fasteners) after selling various non-core businesses (electronic security business to Securitas for $3.2 billion, the automatic doors business to Allegion for $900 million, the oil and gas pipeline business to Pipeline Technique) should have enabled management to plan for increased profitability in the coming years. Moreover, management was expecting its profit margin to increase through the yearas raw material and logistics costs eased. 

Unfortunately, events took a different turn.

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Source Fool.com