Stanley Black & Decker (SWK) risk factors, FY2024 10-K

Business and Operational Risks

1. 01The Company’s business is subject to risks associated with sourcing, manufacturing and maintaining appropriate inventory levels
2. 02The Company’s business is subject to risks associated with the global trade environment, including customs and trade regulations, tariffs, quotas, import taxes and international trade agreements
3. 03Changes in customer or end-user preferences, the inability to maintain mutually beneficial relationships with large customers, inventory reductions by customers, and the inability to penetrate new channels of distribution could adversely affect the Company’s business
4. 04The Company faces active global competition and if it does not compete effectively, its business may suffer
5. 05Customer consolidation could have a material adverse effect on the Company’s business
6. 06Low demand for new products and the inability to develop and introduce new products at favorable margins could adversely impact the Company’s performance and prospects for future growth
7. 07The pace of technological change continues to accelerate and the Company's ability to react effectively to such change may present significant competitive risks
8. 08The Company has significant operations outside of the U.S., which are subject to political, legal, economic and other risks arising from international operations
9. 09The Company’s success depends on its ability to improve productivity and streamline operations to control or reduce costs
10. 10A material disruption of the Company's operations, particularly at its manufacturing facilities or within its information technology infrastructure, could adversely affect business
11. 11If the Company were required to write-down all or part of its goodwill, indefinite-lived trade names, or other definite-lived intangible assets, its net income and net worth could be materially adversely affected

Strategic Risks

1. 12The successful execution of the Company’s business strategy depends on its ability to recruit, retain, train, motivate, and develop employees and execute effective succession planning
2. 13As part of the Company's strategy, it may acquire businesses or assets, divest businesses or assets, enter into strategic alliances and joint ventures, and make similar investments to further its business

Industry and Economic Risks

1. 14Uncertainty about the financial stability of economies outside the U.S. could have a significant adverse effect on the Company's business, results of operations and financial condition
2. 15Negative economic conditions and outlooks in the markets the Company serves may weaken demand for the Company’s products
3. 16The Company is exposed to market risk from changes in foreign currency exchange rates which could negatively impact profitability
4. 17The Company is exposed to counterparty risk in its hedging arrangements
5. 18Tight capital and credit markets or the failure to maintain credit ratings could adversely affect the Company by limiting the Company’s ability to borrow or otherwise access liquidity
6. 19Furthermore, there could be a number of follow-on effects from a credit crisis on the Company’s businesses, including insolvency of key suppliers resulting in product delays, inability of customers to obtain credit to finance purchases of the Company’s products and services and/or customer insolvencies
7. 20The Company is exposed to credit risk on its accounts receivable
8. 21If the investments in employee benefit plans do not perform as expected, the Company may have to contribute additional amounts to these plans, which would otherwise be available to cover operating expenses or other business purposes

Legal, Tax, Regulatory and Compliance Risks

1. 22Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact the Company's reputation, operating results, and financial condition
2. 23The Company is exposed to risks related to compliance with data privacy and governance laws
3. 24Additionally, other countries have enacted or are enacting data localization laws that require data to stay within their borders. In many cases, these laws and regulations apply not only to transfers between unrelated third parties but also to transfers between the Company and its subsidiaries
4. 25Significant judgment and certain estimates are required in determining the Company’s worldwide provision for income taxes. Future tax law changes and audit results may materially increase the Company’s prospective income tax expense
5. 26Environmental legislation or regulations and changing market trends in response to climate change and other environmental related concerns may adversely affect the Company's business
6. 27The Company’s failure to continue to successfully avoid, manage, defend, litigate and accrue for claims and litigation could negatively impact its results of operations or cash flows
7. 28jurisdictions could adversely affect the Company’s operations due to increased costs of compliance and potential liability for non-compliance
8. 29The Company’s products could be recalled
9. 30The Company’s sales to government customers exposes it to business volatility and risks, including government budgeting cycles and appropriations, procurement regulations, governmental policy shifts, early termination of contracts, audits, investigations, sanctions and penalties

Other Risks

1. 31The Company’s results of operations and earnings may not meet guidance, planning assumptions or expectations
2. 32The Company’s failure to maintain its reputation and the image of its brands could adversely impact its business