Fortune Brands Reports Exceptional Sales and Profit Growth in 1Q 2021; Increases 2021 Annual Outlook Based on Continued Expected Outperformance in a Strong Housing Market
Fortune Brands Home & Security (FBHS) reported strong Q1 2021 results with $1.8 billion in sales, a 26% increase year-over-year. EPS rose to $1.26, up from $0.77 in Q1 2020. Operating income reached $248.4 million, a 60% increase. Segment highlights include 33% growth in Plumbing sales and 47% in Outdoors & Security, boosted by the LARSON acquisition. The company anticipates 20%-22% sales growth for 2021 and expects EPS to range from $5.45 to $5.65. With a strong balance sheet, FBHS is well-positioned for continued growth amid a robust housing market.
- Sales increased by 26% year-over-year to $1.8 billion.
- Earnings per share rose to $1.26, up from $0.77 in Q1 2020.
- Operating income increased by 60% to $248.4 million.
- Plumbing sales grew by 33%, driven by strong performance.
- Outdoors & Security sales surged by 47%, including contributions from LARSON.
- Expected full-year sales growth of 20%-22% for 2021.
- None.
Fortune Brands Home & Security, Inc. (NYSE: FBHS, the “Company”, or “Fortune Brands”), an industry-leading home and security products company, today announced first quarter 2021 results.
“Our teams again delivered exceptional above-market results,” said Nicholas Fink, chief executive officer, Fortune Brands. “We continue to outperform in an accelerating home products market at a time when the importance of the home has never been more critical. I am proud of our teams’ effort. We continued to make safety our first priority while working hard to serve our customers. Our upwardly revised outlook reflects our teams’ continued outperformance and ability to capture greater market share and profit opportunities in an increasingly strong market for our products. In addition to driving top-line growth, our Fortune Brands Advantage initiatives are delivering to offset inflation and supply chain headwinds while also freeing up additional investment dollars for our most critical growth priorities. With our attractive categories and strong channel positions, increased investments, and exceptional management team, we are well positioned to drive increasing value for our stakeholders through this period of long-term housing expansion and beyond.”
First Quarter 2021
For the first quarter of 2021, sales were
For each segment in the first quarter of 2021, compared to the prior-year quarter:
- Plumbing sales increased 33 percent, or 30 percent excluding FX, led by strong performance across the business. Operating margin before charges / gains was especially strong at 24.0 percent.
- Cabinets sales increased 11 percent, driven by strong growth across all price points. Operating margin before charges / gains was 10.8 percent, an increase of 180 basis points.
- Outdoors & Security sales increased 47 percent, driven by the addition of LARSON and strong double-digit sales growth of composite decking and doors. Excluding LARSON, organic sales increased 15 percent. Operating margin before charges / gains was 13.5 percent, an increase of 310 basis points.
Balance Sheet and Liquidity
At the end of the quarter, net debt was
Update to Annual Outlook for 2021
The Company expects to continue outperforming a fundamentally strong housing market. The Company now anticipates delivering full-year sales growth in the range of 20 percent to 22 percent, or 13 percent to 15 percent excluding the LARSON acquisition. This reflects the Company’s revised assumptions of a global home products market now expanding by 9 percent to 11 percent, including growth in the U.S. home products market of approximately 10 percent to 12 percent.
The Company now expects EPS before charges / gains for the full year to be in the range of
For 2021, the Company expects to generate free cash flow of approximately
The Company has posted an updated investor presentation on the Fortune Brands website (www.fbhs.com), which includes updated three-year financial targets. Additionally, the Company’s new 2020 ESG report is also available on the Company’s website.
“The U.S. housing market today is considerably underbuilt, and consumers are investing in their homes at historic levels,” said Patrick Hallinan, chief financial officer, Fortune Brands. “We expect the demand for housing will exceed supply for a number of years, and in this environment, we expect to continue accelerating our rate of value creation. We are confident in our ability to navigate inflationary headwinds, while still investing in innovation, brands, and growth capabilities. We expect to translate this growth into strong cash generation and will be working to create additional value through thoughtful capital deployment.”
About Fortune Brands
Fortune Brands Home & Security, Inc. (NYSE: FBHS), headquartered in Deerfield, IL., is a Fortune 500 company, part of the S&P 500 Index and a leader in the home products industry. With trusted brands and market leadership positions in each of its three operating segments, Plumbing, Outdoors & Security, and Cabinets, Fortune Brands’ 27,500 associates work with a purpose to fulfill the dreams of home.
The Company’s growing portfolio of complementary businesses and innovative brands include Moen and the House of Rohl within the Global Plumbing Group; outdoor living and security products from Therma-Tru, LARSON, Fiberon, Master Lock and SentrySafe; and MasterBrand Cabinets’ wide-ranging offerings from Mantra, Diamond, Omega and many more. Visit www.FBHS.com to learn more about FBHS, its brands and how the Company is accelerating its environmental, social and governance (ESG) commitments.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains certain “forward-looking statements” regarding general business strategies, market potential, future financial performance, the potential of our brands and the housing market, and other matters. Statements preceded by, followed by or that otherwise include the words “believes”, “positioned”, “expects”, “estimates”, “plans”, “look to”, “outlook”, and similar expressions or future or conditional verbs such as “will”, “should”, “would”, “may” and “could” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. Important factors that could affect performance and cause results to differ materially from management’s expectations, or could affect the Company’s ability to achieve its strategic goals, include the uncertainties relating to the impact of COVID-19 on the Company’s business, operations and employees and the other factors discussed in our securities filings, including in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission. The forward-looking statements included in this release are made as of the date hereof, and except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this release.
Use of Non-GAAP Financial Information
This press release includes measures not derived in accordance with generally accepted accounting principles (“GAAP”), such as diluted earnings per share before charges / gains, operating income before charges / gains, net sales excluding impact of FX, net sales excluding LARSON net sales, operating margin before charges / gains, EBITDA before charges / gains, net debt, net debt to EBITDA before charges / gains, and free cash flow. These measures should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP and may also be inconsistent with similar measures presented by other companies. Reconciliations of these measures to the most closely comparable GAAP measures, and reasons for the Company’s use of these measures, are presented in the attached pages.
| FORTUNE BRANDS HOME & SECURITY, INC. | ||||||||||||
| (In millions, except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| Net Sales | ||||||||||||
Three Months Ended March 31, |
||||||||||||
2021 |
2020 |
% Change |
||||||||||
| Net Sales (GAAP) | ||||||||||||
| Plumbing |
|
|
33 |
|||||||||
| Outdoors & Security | 461.5 |
313.7 |
47 |
|||||||||
| Cabinets | 687.9 |
620.0 |
11 |
|||||||||
| Total Net Sales |
|
|
26 |
|||||||||
| Current Quarter Operating Income | ||||||||||||
Before Charges & Gains |
GAAP |
|||||||||||
|
|
|
|
|
|
|||||||
Three Months Ended March 31, |
Three Months Ended March 31, |
|||||||||||
| Operating Income (Loss) Before Charges/Gains (a) | 2021 |
2020 |
% Change |
Operating Income (Loss) | 2021 |
2020 |
% Change |
|||||
| Plumbing |
|
|
43 |
Plumbing |
|
|
42 |
|||||
| Outdoors & Security | 62.3 |
32.6 |
91 |
Outdoors & Security | 52.8 |
31.5 |
68 |
|||||
| Cabinets | 74.5 |
55.7 |
34 |
Cabinets | 72.6 |
43.7 |
66 |
|||||
| Corporate expenses | (24.4) |
(22.9) |
(7) |
Corporate expenses | (24.9) |
(24.7) |
(1) |
|||||
| Total Operating Income Before Charges/Gains |
|
|
54 |
Total Operating Income (GAAP) |
|
|
60 |
|||||
| Earnings Per Share Before Charges/Gains (b) | Diluted EPS (GAAP) | |||||||||||
| Diluted |
|
|
68 |
Diluted EPS |
|
|
64 |
|||||
| EBITDA Before Charges/Gains (c) |
|
|
49 |
Net Income (GAAP) |
|
|
63 |
|||||
| (a) (b) (c) For definitions of Non-GAAP measures, see Definitions of Terms page | ||||||||||||
| FORTUNE BRANDS HOME & SECURITY, INC. | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (GAAP) | |||||
| (In millions) | |||||
| (Unaudited) | |||||
March 31, |
December 31, |
||||
2021 |
2020 |
||||
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents |
|
|
|||
| Accounts receivable, net | 828.5 |
734.9 |
|||
| Inventories | 958.4 |
867.2 |
|||
| Other current assets | 202.9 |
187.3 |
|||
| Total current assets | 2,345.9 |
2,208.5 |
|||
| Property, plant and equipment, net | 905.1 |
917.4 |
|||
| Goodwill | 2,466.2 |
2,394.8 |
|||
| Other intangible assets, net of accumulated amortization | 1,434.3 |
1,420.3 |
|||
| Other assets | 330.6 |
417.7 |
|||
| Total assets |
|
|
|||
| Liabilities and equity | |||||
| Current liabilities | |||||
| Accounts payable | 599.2 |
620.5 |
|||
| Other current liabilities | 597.8 |
724.6 |
|||
| Total current liabilities | 1,197.0 |
1,345.1 |
|||
| Long-term debt | 2,682.8 |
2,572.2 |
|||
| Deferred income taxes | 167.1 |
160.5 |
|||
| Other non-current liabilities | 510.8 |
505.4 |
|||
| Total liabilities | 4,557.7 |
4,583.2 |
|||
| Stockholders' equity | 2,924.4 |
2,775.5 |
|||
| Total equity | 2,924.4 |
2,775.5 |
|||
| Total liabilities and equity |
|
|
|||
FORTUNE BRANDS HOME & SECURITY, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In millions) |
|||||||
(Unaudited) |
|||||||
Three Months Ended March 31, |
|||||||
2021 |
2020 |
||||||
| Operating activities | |||||||
| Net income |
|
|
|||||
| Depreciation and amortization | 47.7 |
37.5 |
|||||
| Non-cash lease expense | 10.7 |
7.4 |
|||||
| Deferred taxes | (0.1) |
0.5 |
|||||
| Loss (gain) on equity investment | 2.9 |
(6.6) |
|||||
| Asset impairment charges | - |
9.5 |
|||||
| Other non-cash items | 13.0 |
12.2 |
|||||
| Changes in assets and liabilities, net | (321.2) |
(183.1) |
|||||
| Net cash used in operating activities |
|
|
|||||
| Investing activities | |||||||
| Capital expenditures |
|
|
|||||
| Proceeds from the disposition of assets | 1.7 |
1.5 |
|||||
| Cost of acquisitions, net of cash acquired | 5.2 |
- |
|||||
| Cost of investments in equity securities | - |
(51.6) |
|||||
| Net cash used in investing activities |
|
|
|||||
| Financing activities | |||||||
| Increase in debt, net |
|
|
|||||
| Proceeds from the exercise of stock options | 10.6 |
18.4 |
|||||
| Treasury stock purchases | (54.1) |
(150.0) |
|||||
| Dividends to stockholders | (36.0) |
(33.5) |
|||||
| All other | (7.7) |
(7.6) |
|||||
| Net cash provided by financing activities |
|
|
|||||
| Effect of foreign exchange rate changes on cash | 1.7 |
(15.0) |
|||||
| Net decrease in cash and cash equivalents |
|
|
|||||
| Cash, cash equivalents and restricted cash* at beginning of period | 425.0 |
394.9 |
|||||
| Cash, cash equivalents and restricted cash* at end of period |
|
|
|||||
| FREE CASH FLOW | Three Months Ended March 31, |
2021 Full Year |
|||||
2021 |
2020 |
Approximation |
|||||
| Free Cash Flow** |
|
|
|||||
| Add: | |||||||
| Capital expenditures | 25.4 |
26.9 |
210.0 - 250.0 | ||||
| Less: | |||||||
| Proceeds from the disposition of assets | 1.7 |
1.5 |
1.7 - 5.0 | ||||
{
"@context": "https://schema.org",
"@type": "FAQPage",
"name": "Fortune Brands Reports Exceptional Sales and Profit Growth in 1Q 2021; Increases 2021 Annual Outlook Based on Continued Expected Outperformance in a Strong Housing Market FAQs",
"mainEntity": [
{
"@type": "Question",
"name": "What were Fortune Brands Home & Security's Q1 2021 sales figures?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Fortune Brands reported Q1 2021 sales of $1.8 billion, reflecting a 26% increase over the same quarter in 2020."
}
},
{
"@type": "Question",
"name": "How did earnings per share (EPS) perform in Q1 2021 for FBHS?",
"acceptedAnswer": {
"@type": "Answer",
"text": "EPS for Q1 2021 was $1.26, compared to $0.77 in Q1 2020, marking significant growth."
}
},
{
"@type": "Question",
"name": "What is the expected sales growth for Fortune Brands in 2021?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Fortune Brands anticipates full-year sales growth between 20% and 22% for 2021."
}
},
{
"@type": "Question",
"name": "What impact did the LARSON acquisition have on FBHS sales?",
"acceptedAnswer": {
"@type": "Answer",
"text": "The LARSON acquisition contributed to a 47% growth in Outdoors & Security sales."
}
},
{
"@type": "Question",
"name": "What is the projected EPS for Fortune Brands in 2021?",
"acceptedAnswer": {
"@type": "Answer",
"text": "FBHS expects EPS before charges/gains to range from $5.45 to $5.65 for the full year 2021."
}
}
]
}
FAQ
What were Fortune Brands Home & Security's Q1 2021 sales figures?
Fortune Brands reported Q1 2021 sales of $1.8 billion, reflecting a 26% increase over the same quarter in 2020.
How did earnings per share (EPS) perform in Q1 2021 for FBHS?
EPS for Q1 2021 was $1.26, compared to $0.77 in Q1 2020, marking significant growth.
What is the expected sales growth for Fortune Brands in 2021?
Fortune Brands anticipates full-year sales growth between 20% and 22% for 2021.
What impact did the LARSON acquisition have on FBHS sales?
The LARSON acquisition contributed to a 47% growth in Outdoors & Security sales.
What is the projected EPS for Fortune Brands in 2021?
FBHS expects EPS before charges/gains to range from $5.45 to $5.65 for the full year 2021.
FORTUNE BRANDS HOME & SEC INC (DE)
NYSE:FBHSFBHS RankingsFBHS Latest NewsFBHS Stock Data
7.92B
153.38M
0.41%
89.29%
1.75%
Building Products & Equipment
Industrials
United States of America
Deerfield
| |||||||