By Anandita Mehrotra

(Reuters) -Stanley Black & Decker cut its annual profit forecast on Wednesday, citing margin pressures and rising costs linked to U.S. President Donald Trump’s broad tariffs, sending its shares down 3.4%.

Trump’s tariffs on metals such as aluminum and steel, paired with levies on countries including China, have threatened to disrupt an already-strained supply chain, pushing up costs for companies in the sector.

In response to policy changes, the company said it hiked prices in April and plans to implement a second increase in the third quarter.

Stanley Black, which serves home improvement retailers, construction firms and aerospace clients, has not yet determined the price increases for its second round but expects it to be higher than the first, Chief Operating Officer Christopher Nelson said during a post-earnings call with analysts.

It is aiming to cut tariff costs from China over the next 12 to 24 months through supply chain adjustments.

"In light of the current environment, we are accelerating adjustments to our supply chain and exploring all options as we seek to minimize the impact of tariffs," said CEO Donald Allan Jr.

The Connecticut-based company said it now expects 2025 adjusted profit of about $4.50 per share, compared to its previous forecast of $5.25, which excluded an impact from tariffs.

Despite the challenges, the tool maker’s first-quarter adjusted profit of 75 cents per share surpassed the average of analysts’ estimates of 66 cents per share, according to data compiled by LSEG.

"We did have some demand strength in March that might have been associated with tariff pre-buying," finance chief Patrick Hallinan said on the call.

Total quarterly revenue was $3.74 billion, down over 3% from a year earlier, topping estimates of about $3.69 billion.