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 2022 earnings before charges/gains of $1.31 per share, which surpassed the Zacks Consensus Estimate of $1.24 by 5.7%. On a year-over-year basis, the bottom line decreased 3.7% due to increasing cost of sales.
In the first quarter, Fortune Brands’ net sales were $1,917.3 million, increasing 8% from the year-ago figure. The improvement was driven by solid segmental performances. Also, the top line beat the consensus estimate of $1,872 million by 2.4%.
Segmental Details
Cabinets’ quarterly net sales grew 13% year over year to $777.1 million. Results were driven by continued strong demand for Fortune Brands’ products.
Water innovations net sales increased 4% year over year to $643.6 million. Results were driven by an impressive performance across the business.
Outdoors & Security’s net sales increased 8% to $496.6 million on the back of solid sales growth for decking, doors and security products and a positive contribution from the LARSON buyout.
FBHS also announced its intention to split into two publicly traded companies. Fortune Brands’ existing cabinets business will be recognised as a standalone publicly traded company and it will approximately take 12 months to complete the process. Also, FBHS renamed its Global Plumbing Group to Water Innovations, effective first-quarter 2022.
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
In the first quarter, Fortune Brands’ cost of sales increased 10% year over year to $1,237.8 million. The metric represented 64.6% of net sales compared with 63.6% in the year-ago quarter. Selling, general and administrative expenses increased 10% to $409.5 million, accounting for 21.4% of the net sales compared with 21% a year ago.
Operating income before charges/gains decreased 5% to $249.6 million. Operating margin before charges/gains were 13%, down 180 basis points year over year. Interest expenses increased 2% to $21.8 million.
Balance Sheet
Exiting the first quarter 2022, Fortune Brands’ cash and cash equivalents were $378.2 million, down 19.8% from $471.5 million at the end of the previous quarter. Its long-term debt increased 45.8% to $3,367.9 million sequentially.
In the first three months of 2022, net cash used in operating activities was $183.1 million compared with $69.2 million used in the year-ago quarter. Capital expenditure amounted to $60.8 million, up from $25.4 million in the year ago quarter. In the reported quarter, its free cash outflow was $235.7 million compared with $82.3 million in the year-ago quarter.
In the first three months of 2022, Fortune Brands rewarded its shareholders with a dividend payout of $37.2 million, up 3.3% year over year. The amount spent on purchasing treasury stock totaled $377.1 million, up 597%.
Outlook
Fortune Brands anticipates benefiting from strength in its housing end market and a firm focus on product innovation in the quarters ahead.
For 2022, FBHS expects sales to increase 5.5-7.5% from the previous year’s level, based on its anticipation of U.S. home products market growth of 4-6%. Earnings before charges/gains are adjusted to $6.40-$6.60 per share from the earlier issued projection of $6.35-$6.55.
For 2022, cash flow from operations is anticipated to be $973-$1,108 million, while capital expenditures are likely to be $375-$425 million. Management anticipates a free cash flow generation of $615-$700 million.
Zacks Rank and Stocks to Consider
With a market capitalization of $10.1 billion, FBHS currently carries a Zacks Rank #4 (Hold).
Some better-ranked companies from the retail-wholesale sectors are discussed below.
AN’s earnings surprise in the last four quarters was 27.4%, on average. In the past 60 days, AutoNation’s earnings estimates have increased 18.2% for 2022. AN’s shares have gained 6.6% in the past three months.
FIGS, Inc. (FIGS - Free Report) has a Zacks Rank #2 (Buy), currently. FIGS delivered a trailing four-quarter earnings surprise of 258.7%, on average.
Earnings estimates for FIGS have increased 16.7% for 2022 in the past 60 days. The stock has declined 27.7% in the past three months.
Dollar Tree, Inc. (DLTR - Free Report) carries a Zacks Rank of 2, currently. DTLR’s earnings surprise in the last four quarters was 11.76%, on average.
In the past 60 days, DTLR’s earnings estimates have increased 7.2% for 2022. The stock has grown 27.4% in the past three months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Fortune Brands (FBHS) Q1 Earnings & Revenues Beat Estimates
Fortune Brands Home & Security, Inc. reported first-quarter 2022 earnings before charges/gains of $1.31 per share, which surpassed the Zacks Consensus Estimate of $1.24 by 5.7%. On a year-over-year basis, the bottom line decreased 3.7% due to increasing cost of sales.
In the first quarter, Fortune Brands’ net sales were $1,917.3 million, increasing 8% from the year-ago figure. The improvement was driven by solid segmental performances. Also, the top line beat the consensus estimate of $1,872 million by 2.4%.
Segmental Details
Cabinets’ quarterly net sales grew 13% year over year to $777.1 million. Results were driven by continued strong demand for Fortune Brands’ products.
Water innovations net sales increased 4% year over year to $643.6 million. Results were driven by an impressive performance across the business.
Outdoors & Security’s net sales increased 8% to $496.6 million on the back of solid sales growth for decking, doors and security products and a positive contribution from the LARSON buyout.
FBHS also announced its intention to split into two publicly traded companies. Fortune Brands’ existing cabinets business will be recognised as a standalone publicly traded company and it will approximately take 12 months to complete the process. Also, FBHS renamed its Global Plumbing Group to Water Innovations, effective first-quarter 2022.
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
Costs & Expenses
In the first quarter, Fortune Brands’ cost of sales increased 10% year over year to $1,237.8 million. The metric represented 64.6% of net sales compared with 63.6% in the year-ago quarter. Selling, general and administrative expenses increased 10% to $409.5 million, accounting for 21.4% of the net sales compared with 21% a year ago.
Operating income before charges/gains decreased 5% to $249.6 million. Operating margin before charges/gains were 13%, down 180 basis points year over year. Interest expenses increased 2% to $21.8 million.
Balance Sheet
Exiting the first quarter 2022, Fortune Brands’ cash and cash equivalents were $378.2 million, down 19.8% from $471.5 million at the end of the previous quarter. Its long-term debt increased 45.8% to $3,367.9 million sequentially.
In the first three months of 2022, net cash used in operating activities was $183.1 million compared with $69.2 million used in the year-ago quarter. Capital expenditure amounted to $60.8 million, up from $25.4 million in the year ago quarter. In the reported quarter, its free cash outflow was $235.7 million compared with $82.3 million in the year-ago quarter.
In the first three months of 2022, Fortune Brands rewarded its shareholders with a dividend payout of $37.2 million, up 3.3% year over year. The amount spent on purchasing treasury stock totaled $377.1 million, up 597%.
Outlook
Fortune Brands anticipates benefiting from strength in its housing end market and a firm focus on product innovation in the quarters ahead.
For 2022, FBHS expects sales to increase 5.5-7.5% from the previous year’s level, based on its anticipation of U.S. home products market growth of 4-6%. Earnings before charges/gains are adjusted to $6.40-$6.60 per share from the earlier issued projection of $6.35-$6.55.
For 2022, cash flow from operations is anticipated to be $973-$1,108 million, while capital expenditures are likely to be $375-$425 million. Management anticipates a free cash flow generation of $615-$700 million.
Zacks Rank and Stocks to Consider
With a market capitalization of $10.1 billion, FBHS currently carries a Zacks Rank #4 (Hold).
Some better-ranked companies from the retail-wholesale sectors are discussed below.
AutoNation, Inc. (AN - Free Report) sports a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
AN’s earnings surprise in the last four quarters was 27.4%, on average. In the past 60 days, AutoNation’s earnings estimates have increased 18.2% for 2022. AN’s shares have gained 6.6% in the past three months.
FIGS, Inc. (FIGS - Free Report) has a Zacks Rank #2 (Buy), currently. FIGS delivered a trailing four-quarter earnings surprise of 258.7%, on average.
Earnings estimates for FIGS have increased 16.7% for 2022 in the past 60 days. The stock has declined 27.7% in the past three months.
Dollar Tree, Inc. (DLTR - Free Report) carries a Zacks Rank of 2, currently. DTLR’s earnings surprise in the last four quarters was 11.76%, on average.
In the past 60 days, DTLR’s earnings estimates have increased 7.2% for 2022. The stock has grown 27.4% in the past three months.