Adjusted earnings per share was $1.08, inclusive of a discrete tax benefit.
Adjusted EBITDA margin was 8.1%, down 260 basis points versus prior year, reflecting gross margin changes and growth investments.
Adjusted gross margin rate was 27.5%, down due to a 3-point impact from tariffs and lower volume, partially offset by supply chain efficiencies and price actions.
Adjusted segment margin for Tools & Outdoor was 8%, down 240 basis points due to tariffs, lower volume, and growth investments.
Engineered Fastening adjusted segment margin was 10.8%, down due to softness in automotive fasteners.
Engineered Fastening segment revenue was down 2% reported and 1% organically, with aerospace growing over 20% organically.
Second quarter 2025 revenue was $3.9 billion, down 2% versus the previous year and down 3% organically.
Second quarter free cash flow was $135 million, strong despite operational impacts from trade policies.
The quarter was impacted by a slow outdoor buying season and shipment disruptions related to tariffs.
Tools & Outdoor segment revenue was approximately $3.5 billion, down 2% year-over-year and 3% organically.
Strategic Leadership Transition and Kevin Stein's Retirement
Kevin Stein announced his retirement effective September 30 after 7+ years as CEO, emphasizing his leadership legacy and the company's growth under his tenure.
Mike Lisman will succeed Kevin as CEO, with Kevin remaining as an adviser during the transition, highlighting leadership continuity and succession planning.
Chris Layden has been selected as the next President and CEO, starting September 2, 2025, following a rigorous search process involving the Board and current CEO Peter Quigley.
Peter Quigley will remain as a strategic adviser to ensure a smooth leadership transition, leveraging his 23-year tenure and industry experience.
Layden's background includes leadership roles at Prolink and ManpowerGroup, with a focus on transformations, go-to-market initiatives, and profitable growth, aligning with Kelly's strategic evolution.
The leadership change is positioned as a key step in Kelly's long-term strategic growth and operational excellence, with management emphasizing continuity and future focus.
Peter Quigley's departure marks the end of a significant era, and the company aims to build on his legacy by empowering the new CEO to lead Kelly into a new phase of growth.
Dafinchi