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Dec 31, 2022
Fortune Brands Q4 2022 Earnings Report
Delivered solid profit results while executing transformational actions amidst a challenging environment.
Key Takeaways
Fortune Brands Innovations reported a 7% decrease in Q4 sales, with earnings per share at $0.99. The company is prioritizing market-beating sales results, margin preservation, and cash generation in 2023 against a declining market.
Q4 sales declined 7 percent.
Q4 EPS were $0.99; EPS before / charges gains were $1.07.
Operating margin was 16.1 percent, Operating margin before charges / gains was 17.3 percent.
The Company used a portion of the proceeds from the dividend from the Cabinets spin-off to pay down all outstanding variable rate debt.
Fortune Brands
Fortune Brands
Fortune Brands Revenue by Segment
Revenue by Segment
Water Revenue
CapyFin.comOutdoors Revenue
CapyFin.com Forward Guidance
The Company expects full-year 2023 sales to be down 5 percent to 7 percent with operating margins between 16 percent and 17 percent. The Company expects EPS before charges / gains to be in the range of $3.60 to $3.80. For 2023, the Company expects to generate free cash flow of approximately $475 million, with a cash conversion rate of around 100 percent.
Positive Outlook
- Successfully executed a spin-off of Cabinets business.
- Rebranded entire Company.
- Reorganized the Company from a decentralized structure.
- Placed global supply chain resources under a unified leadership team.
- Will enable to deliver on the long-term targets.
Challenges Ahead
- The Company’s assumption of a total global market decline of 6.5 percent to 8.5 percent.
- The U.S. housing market also declining 6.5 percent to 8.5 percent.
- Expects full-year 2023 sales to be down 5 percent to 7 percent.
- Implies decremental operating leverage of between 25 percent and 30 percent.
- Expects EPS before charges / gains to be in the range of $3.60 to $3.80.
Revenue & Expenses
Visualization of income flow from segment revenue to net income