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Sep 30, 2022

Fortune Brands Q3 2022 Earnings Report

Fortune Brands delivered strong operating margin and profit results, and updated its guidance to reflect a softening market environment.

Key Takeaways

Fortune Brands Home & Security, Inc. announced third quarter 2022 results, with sales increasing 3% to $2.1 billion and EPS before charges/gains increasing 20% to $1.79. The company updated its full-year guidance to reflect a softening market environment.

3Q 2022 sales of $2.1 billion, an increase of 3 percent versus a year ago

3Q 2022 earnings per share (EPS) of $1.57, an increase of 8 percent versus a year ago

EPS before charges / gains of $1.79, an increase of 20 percent versus a year ago

Full-year guidance updated to reflect a softening market environment

Total Revenue
$1.2B
Previous year: $1.27B
-5.9%
EPS
$1.57
Previous year: $1.47
+6.8%
Operating Margin Before Charges/Gains
16.3%
Previous year: 14.8%
+10.1%
Gross Profit
$744M
Previous year: $706M
+5.3%
Cash and Equivalents
$345M
Previous year: $461M
-25.0%
Free Cash Flow
$187M
Previous year: $121M
+55.0%
Total Assets
$8.42B
Previous year: $7.87B
+6.9%

Fortune Brands

Fortune Brands

Fortune Brands Revenue by Segment

Forward Guidance

The Company now anticipates delivering 2022 full-year sales growth in the range of 4.5 percent to 5.5 percent relative to a global home products market growing at 2 percent to 4 percent and a U.S. home products market growing at 3 percent to 5 percent. The Company now expects EPS before charges / gains for the full year to be in the range of $6.20 to $6.30. The Company now expects to generate free cash flow of approximately $400 million to $450 million.

Positive Outlook

  • Delivering 2022 full-year sales growth in the range of 4.5 percent to 5.5 percent
  • Global home products market growing at 2 percent to 4 percent
  • U.S. home products market growing at 3 percent to 5 percent
  • EPS before charges / gains for the full year to be in the range of $6.20 to $6.30
  • Generate free cash flow of approximately $400 million to $450 million

Challenges Ahead

  • Increasing headwinds in response to slowing new construction
  • Increasing headwinds in response to slowing R&R activity
  • Greater than expected channel inventory reductions
  • Softer market in 2023
  • Housing affordability weighed on the consumer