We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fortune Brands Home & Security, Inc. reported first-quarter 2021 earnings before charges/gains of $1.36 per share, which surpassed the Zacks Consensus Estimate of $1.04 by 30.8%. On a year-over-year basis, the bottom line increased 67.9% on the back of sales growth.
In the first quarter, Fortune Brands’ net sales were $1,771 million, increasing 26% from the year-ago figure. The improvement was driven by solid performance across all of its segments. Also, the top line beat the consensus estimate of $1,641 million by 7.9%.
Segmental Details
Quarterly net sales for Cabinets grew 11% year over year to $687.9 million. Results were driven by continued solid demand for the company’s products.
Plumbing net sales increased 33% year over year to $621.6 million. Results were driven by impressive performance across the business.
Outdoors & Security’s net sales increased 47% to $461.5 million on the back of double-digit sales growth for composite decking and doors products.
Costs & Expenses
In the first quarter, Fortune Brands’ cost of sales increased 24% year over year to $1,126.9 million. It represented 63.6% of net sales compared with 64.8% in the year-ago quarter. Selling, general and administrative expenses increased 18% to $371.5 million, and represented 21% of the net sales compared with 22.4% a year ago.
Operating income before charges/gains increased 54% to $261.8 million. Operating margin before charges/gains climbed 270 basis points to 14.8%. Interest expenses decreased 3% to $21.4 million.
Balance Sheet
Exiting the first quarter, Fortune Brands’ cash and cash equivalents were $356.1 million, down 15% from $419.1 million at the end of 2020. Its long-term debt increased 4.3% to $2,682.8 million sequentially.
In first three months of 2021, net cash used in operating activities was $69.2 million compared with $13.8 million used in the year-ago period. Capital expenditure amounted to $25.4 million, down from $26.9 million.
Outlook
For 2021, Fortune Brands anticipates sales to increase 20-22% from the previous year. Earnings before charges/gains are estimated to be $5.45-$5.65 per share. Also, it anticipates to generate free cash flow of $650-$700 million.
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
Alcoa delivered a earnings surprise of 56.78%, on average, in the trailing four quarters.
Lakeland Industries delivered a earnings surprise of 230.73%, on average, in the trailing four quarters.
Energy Recovery delivered a earnings surprise of 232.08%, on average, in the trailing four quarters.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Fortune Brands (FBHS) Q1 Earnings & Revenues Beat Estimates
Fortune Brands Home & Security, Inc. reported first-quarter 2021 earnings before charges/gains of $1.36 per share, which surpassed the Zacks Consensus Estimate of $1.04 by 30.8%. On a year-over-year basis, the bottom line increased 67.9% on the back of sales growth.
In the first quarter, Fortune Brands’ net sales were $1,771 million, increasing 26% from the year-ago figure. The improvement was driven by solid performance across all of its segments. Also, the top line beat the consensus estimate of $1,641 million by 7.9%.
Segmental Details
Quarterly net sales for Cabinets grew 11% year over year to $687.9 million. Results were driven by continued solid demand for the company’s products.
Plumbing net sales increased 33% year over year to $621.6 million. Results were driven by impressive performance across the business.
Outdoors & Security’s net sales increased 47% to $461.5 million on the back of double-digit sales growth for composite decking and doors products.
Costs & Expenses
In the first quarter, Fortune Brands’ cost of sales increased 24% year over year to $1,126.9 million. It represented 63.6% of net sales compared with 64.8% in the year-ago quarter. Selling, general and administrative expenses increased 18% to $371.5 million, and represented 21% of the net sales compared with 22.4% a year ago.
Operating income before charges/gains increased 54% to $261.8 million. Operating margin before charges/gains climbed 270 basis points to 14.8%. Interest expenses decreased 3% to $21.4 million.
Balance Sheet
Exiting the first quarter, Fortune Brands’ cash and cash equivalents were $356.1 million, down 15% from $419.1 million at the end of 2020. Its long-term debt increased 4.3% to $2,682.8 million sequentially.
In first three months of 2021, net cash used in operating activities was $69.2 million compared with $13.8 million used in the year-ago period. Capital expenditure amounted to $25.4 million, down from $26.9 million.
Outlook
For 2021, Fortune Brands anticipates sales to increase 20-22% from the previous year. Earnings before charges/gains are estimated to be $5.45-$5.65 per share. Also, it anticipates to generate free cash flow of $650-$700 million.
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
Fortune Brands Home & Security, Inc. price-consensus-eps-surprise-chart | Fortune Brands Home & Security, Inc. Quote
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks are Alcoa Corporation (AA - Free Report) , Lakeland Industries, Inc. (LAKE - Free Report) and Energy Recovery, Inc. (ERII - Free Report) . While Alcoa currently sports a Zacks Rank #1 (Strong Buy), Lakeland Industries and Energy Recovery carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcoa delivered a earnings surprise of 56.78%, on average, in the trailing four quarters.
Lakeland Industries delivered a earnings surprise of 230.73%, on average, in the trailing four quarters.
Energy Recovery delivered a earnings surprise of 232.08%, on average, in the trailing four quarters.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>