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Fortune Brands (FBHS) Q4 Earnings & Revenues Beat Estimates

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Fortune Brands Home & Security, Inc. reported fourth-quarter 2021 earnings before charges/gains of $1.32 per share, which surpassed the Zacks Consensus Estimate of $1.30 by 1.54%. On a year-over-year basis, the bottom line increased 5.6% on the back of sales growth.

In 2021, the company’s earnings before charges/gains came in at $5.73, up 36.8% from $4.19 in 2020.

In the fourth quarter, Fortune Brands’ net sales were $1,962.8 million, increasing 18.3% from the year-ago figure. The improvement was driven by solid performance across all its segments. Also, the top line beat the consensus estimate of $1,927 million by 1.85%.

In 2021, the company’s net sales were $7,656.1 million, up 25.7% from $6,090.3 million in 2020.

Segmental Details

Cabinets’ quarterly net sales grew 14% year over year to $744.8 million. Results were driven by continued strong demand for the company’s products.

Plumbing net sales increased 10% year over year to $703.6 million. Results were driven by impressive performance across the business.

Outdoors & Security’s net sales increased 40% to $514.4 million on the back of solid sales growth for decking, doors and security products and positive contribution from the LARSON buyout.

Costs & Expenses

In the fourth quarter, Fortune Brands’ cost of sales increased 20.9% year over year to $1,271.9 million. It represented 64.8% of net sales compared with 63.4% in the year-ago quarter. Selling, general and administrative expenses increased 13.4% to $412.9 million and represented 21% of the net sales compared with 21.9% a year ago.

Operating income before charges/gains increased 7% to $263.7 million. Operating margin before charges/gains were 13.4%, down 140 basis points year over year. Interest expenses increased 8% to $21.1 million.

Balance Sheet

Exiting 2021, Fortune Brands’ cash and cash equivalents were $471.5 million, up 2.3% from $460.7 million at the end of the previous quarter. Its long-term debt decreased 12.1% to $2,309.8 million sequentially.

In 2021, net cash provided by operating activities was $688.7 million compared with $825.7 million a year ago. Capital expenditure amounted to $214.2 million, up from $150.5 million. In 2021, its free cash flow was $518.2 million, down 30.1%.

In 2021, the company rewarded shareholders with a dividend payout of $143 million. The amount represents growth of 7.3% year over year. Amount spent on purchasing treasury stock totaled $447.7 million, up 138.6%.


Fortune Brands anticipates benefiting from strength in its housing end market and its focus on product innovation in the quarters ahead.

For 2022, the company expects sales to increase 5.5-7.5% from the previous year, based on its anticipation of U.S. home products market growth of 4-6%. Earnings before charges/gains are estimated to be $6.35-$6.55 per share, indicating growth of 11-14% year over year.

For 2022, cash flow from operations is anticipated to be $973-$1,108 million, while capital expenditures are likely to be $375-$425 million. It anticipates generating a free cash flow of $615-$700 million.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Zacks Retail-Wholesale sector are discussed below.

The Lovesac Company (LOVE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Its earnings surprise in the last four quarters was 245.88%, on average.

In the past 60 days, Lovesac’s earnings estimates have increased 40.6% for fiscal 2022 (ending January 2022) and 57.9% for fiscal 2023 (ending January 2023). LOVE’s shares have lost 36.3% in the past three months.

Tempur Sealy International, Inc. (TPX - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 22.39%, on average.

Tempur Sealy’s earnings estimates have been stable for 2021 (results awaited) and 2022 in the past 60 days. TPX’s shares have lost 11.1% in the past three months.

Ethan Allen Interiors Inc. (ETD - Free Report) presently sports a Zacks Rank #1. Its earnings surprise in the last four quarters was 12.02%, on average.

ETD’s earnings estimates have increased 5.8% for fiscal 2022 (ending June 2022) and 4.3% for fiscal 2023 (ending June 2023) in the past 60 days. Its shares have gained 2.3% in the past three months.

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