Turn off the water source, disconnect any attached hose, remove the old spigot, clean the water pipe threads and install a new spigot to repair an outside faucet with stripped threads. For outside faucets with leaks, replacement is usually the quickest and least expensive way to avoid additional damage from water leaking into the wall. The replacement process usually requires a second person to assist.
To turn off the water source, there may be a cut-off valve for the particular spigot, or you may have to shut off the water at the main supply for the house. Remove any hoses attached to the spigot, and open the spigot valve fully to let any remaining water in the lines drain.
Remove the screws in the mounting plate holding the spigot to the wall. Unscrew the spigot from the water pipe in a clockwise manner using a pipe wrench while the second person is inside of the house securing the pipe with a wrench so it does not unscrew from the next connection point.
Clean the threads of the water pipe thoroughly with steel wool or an appropriate cleaning compound. Apply Teflon plumber's tape around the pipe threads to ensure a good seal. Screw on the new spigot making sure that both the spigot and the water pipe are tight. Reattach the spigot to the mounting plate. Turn on the water, and inspect for leaks.