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 (FBHS) to Post Q3 Earnings: Beat in Store?
Read MoreHide Full Article
Fortune Brands Home & Security, Inc. is scheduled to report third-quarter 2021 results on Oct 26, after market close.
The company reported better-than-expected results in each of the trailing four quarters. Earnings surprise in the last four quarters was 16.17%, on average. In the last reported quarter, it posted earnings of $1.56 per share, which beat the Zacks Consensus Estimate of $1.37 by 13.87%.
Image Source: Zacks Investment Research
In the past three months, the company has gained 0.7% compared with the industry’s growth of 7.5%.
Factors at Play
Strength across Fortune Brands’ plumbing business, driven by the growing popularity of brands and strong customer service, is expected to have augmented its Plumbing segment’s revenues in the third quarter. Robust demand for the company’s doors and decking products, along with strength in its security business, is likely to have boosted the Outdoors & Security segment’s top-line performance. Strong demand for its value price point cabinetry products along with solid backlog level is likely to have supported the Cabinets segment’s revenues.
The company’s acquisition of LARSON Manufacturing (December 2020) has strengthened its foothold in the doors and decking space by expanding its offering for outdoor living. This buyout had a positive contribution of 32% and 35% to the Outdoors & Security segment’s sales growth in the first and second quarters of 2021, respectively. This trend is likely to have continued in the third quarter as well. Its Fiberon business, which has been strengthening its prospects in the outdoor living space, is anticipated to have boosted its performance.
The company’s investment in core competencies including brand-building, product innovation and digital initiatives is likely to have been tailwinds. Also, its cost control measures along with its focus on supply-chain optimization and operational efficiency are likely to have helped it maintain a healthy margin performance in the to-be-reported quarter.
However, the rising cost of sales and operating expenses have been weighing on it over time. Despite the company’s cost-reduction initiatives, its cost of sales rose 24% year over year while selling, general and administrative expenses increased 18% in the second quarter. High costs might have adversely impacted its margin and profitability in the third quarter as well.
The Zacks Consensus Estimate for the Plumbing segment's revenues is pegged at $667 million, suggesting growth of 12.9% from the year-ago reported number but 4% decline sequentially. The consensus estimate for the Cabinets segment’s revenues stands at $710 million, implying growth of 8.4% and 0.6% on a year-over-year and sequential basis, respectively. The consensus mark for the Outdoors & Security segment’s revenues stands at $561 million, implying a 37.8% and 4.7% increase from the year-ago and the quarter-ago reported numbers, respectively.
The consensus estimate for the company’s third-quarter total revenues is currently pegged at $1,942 million, suggesting growth of 17.6% and 0.3% year over year and sequentially, respectively. The consensus estimate for earnings of $1.42 suggests an improvement of 19.3% year over year but a fall of 9% sequentially.
Fortune Brands Home & Security, Inc. Price and EPS Surprise
Our proven model suggests an earnings beat for Fortune Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. This is the case here as elaborated below.
Earnings ESP: The company has an Earnings ESP of +1.77% as the Most Accurate Estimate is pegged at $1.44, higher than the Zacks Consensus Estimate of $1.42.
Zacks Rank: Fortune Brands carries a Zacks Rank #2.
Other Key Picks
Here are some other companies you may want to consider from the Zacks Retail-Wholesale sector, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Image: Bigstock
Fortune Brands (FBHS) to Post Q3 Earnings: Beat in Store?
Fortune Brands Home & Security, Inc. is scheduled to report third-quarter 2021 results on Oct 26, after market close.
The company reported better-than-expected results in each of the trailing four quarters. Earnings surprise in the last four quarters was 16.17%, on average. In the last reported quarter, it posted earnings of $1.56 per share, which beat the Zacks Consensus Estimate of $1.37 by 13.87%.
In the past three months, the company has gained 0.7% compared with the industry’s growth of 7.5%.
Factors at Play
Strength across Fortune Brands’ plumbing business, driven by the growing popularity of brands and strong customer service, is expected to have augmented its Plumbing segment’s revenues in the third quarter. Robust demand for the company’s doors and decking products, along with strength in its security business, is likely to have boosted the Outdoors & Security segment’s top-line performance. Strong demand for its value price point cabinetry products along with solid backlog level is likely to have supported the Cabinets segment’s revenues.
The company’s acquisition of LARSON Manufacturing (December 2020) has strengthened its foothold in the doors and decking space by expanding its offering for outdoor living. This buyout had a positive contribution of 32% and 35% to the Outdoors & Security segment’s sales growth in the first and second quarters of 2021, respectively. This trend is likely to have continued in the third quarter as well. Its Fiberon business, which has been strengthening its prospects in the outdoor living space, is anticipated to have boosted its performance.
The company’s investment in core competencies including brand-building, product innovation and digital initiatives is likely to have been tailwinds. Also, its cost control measures along with its focus on supply-chain optimization and operational efficiency are likely to have helped it maintain a healthy margin performance in the to-be-reported quarter.
However, the rising cost of sales and operating expenses have been weighing on it over time. Despite the company’s cost-reduction initiatives, its cost of sales rose 24% year over year while selling, general and administrative expenses increased 18% in the second quarter. High costs might have adversely impacted its margin and profitability in the third quarter as well.
The Zacks Consensus Estimate for the Plumbing segment's revenues is pegged at $667 million, suggesting growth of 12.9% from the year-ago reported number but 4% decline sequentially. The consensus estimate for the Cabinets segment’s revenues stands at $710 million, implying growth of 8.4% and 0.6% on a year-over-year and sequential basis, respectively. The consensus mark for the Outdoors & Security segment’s revenues stands at $561 million, implying a 37.8% and 4.7% increase from the year-ago and the quarter-ago reported numbers, respectively.
The consensus estimate for the company’s third-quarter total revenues is currently pegged at $1,942 million, suggesting growth of 17.6% and 0.3% year over year and sequentially, respectively. The consensus estimate for earnings of $1.42 suggests an improvement of 19.3% year over year but a fall of 9% sequentially.
Fortune Brands Home & Security, Inc. Price and EPS Surprise
Fortune Brands Home & Security, Inc. price-eps-surprise | Fortune Brands Home & Security, Inc. Quote
Earnings Whispers
Our proven model suggests an earnings beat for Fortune Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. This is the case here as elaborated below.
Earnings ESP: The company has an Earnings ESP of +1.77% as the Most Accurate Estimate is pegged at $1.44, higher than the Zacks Consensus Estimate of $1.42.
Zacks Rank: Fortune Brands carries a Zacks Rank #2.
Other Key Picks
Here are some other companies you may want to consider from the Zacks Retail-Wholesale sector, as our model shows that these too have the right combination of elements to post an earnings beat this season:
AutoNation, Inc. (AN - Free Report) has an Earnings ESP of +8.85% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Beacon Roofing Supply, Inc. (BECN - Free Report) has an Earnings ESP of +6.00% and a Zacks Rank #2.
Expedia Group, Inc. (EXPE - Free Report) has an Earnings ESP of +5.68% and a Zacks Rank #3.