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Fortune Brands (FBIN) Q4 Earnings Top, Net Sales Lag, Stock Down
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Fortune Brands Innovations, Inc. (FBIN - Free Report) reported mixed results for fourth-quarter 2023, with earnings beating the Zacks Consensus Estimate and net sales missing the same. On a year-over-year basis, net sales increased, but earnings declined.
Despite a challenging macro environment, the company's teams successfully delivered, progressed long-term initiatives and executed on priorities. The company's results this year highlight its focus on surpassing market sales, maintaining margins and generating cash.
In the past year, FBIN has undertaken transformative actions to better leverage the strength of its aligned organization, focusing on leading brands, meaningful innovation and advantaged channel relationships. These actions and a focus on market segments with long-term growth opportunities are likely to drive the company's performance in 2024 and beyond.
Following the earnings release, shares of Fortune Brands lost 0.98% in the after-market trading session on Jan 30.
Inside the Numbers
Non-GAAP earnings per share (EPS) of 95 cents surpassed the Zacks Consensus Estimate of 93 cents by 2.2%. However, the metric declined 11% from $1.07 reported a year ago.
Fortune Brands Innovations, Inc. Price, Consensus and EPS Surprise
Net sales of $1,161 million missed the consensus estimate of $1,183 million by 1.9%. However, the metric increased 3% from the year-ago quarter’s figure.
The non-GAAP operating income declined 6% year over year to $183.6 million. Non-GAAP operating margin contracted 150 basis points (bps) from the year-ago period’s levels to 15.8% for the quarter.
Segment Discussion
Water Innovations: The segment's net sales of $663 million increased 3% from the prior-year quarter’s levels. The upside can be attributed to the Emtek acquisition. Non-GAAP operating margin contracted 220 bps year over year to 21.8%.
Outdoors: The segment’s net sales declined 7% year over year to $309 million. Segmental non-GAAP operating margin expanded 10 bps year over year to 13.9%.
Security: Net sales of $189 million increased 20% year over year, driven by the U.S. and Canadian Yale and August residential smart locks acquisition. The segment’s non-GAAP operating margin expanded 20 bps year over year to 17.2%.
2023 Highlights
Net sales came in at $4,626 million, down 2% year over year in 2023. Non-GAAP earnings per share came in at $3.91 compared with $4.24 a year ago.
Non-GAAP operating income declined 9% year over year to $738 million. The non-GAAP operating margin contracted 110 bps from the year-ago period’s levels to 16%.
Financials
As of Dec 30, 2023, Fortune Brands reported cash and cash equivalents of $366.4 million compared with $642.5 million at the end of 2023. Net cash provided by operating activities totaled $1.60 billion compared with $566.3 million in 2022.
Long-term debt, as of Dec 30, 2023, was $2,670 million compared with $2,074 million as of 2022 end.
2024 Guidance
For 2024, FBIN expects net sales growth to range between 3.5-5.5%. It also expects the non-GAAP operating margin to be 16.5-17.5%.
Non-GAAP earnings per share are expected to be in the range of $4.20-$4.40.
Zacks Rank & Other Key Picks
Fortune Brands currently carries a Zacks Rank #2 (Buy).
Here are some other top-ranked stocks from the Zacks Retail-Wholesale sector:
Carrols Restaurant Group, Inc. (TAST - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 102% on average. Shares of TAST have rallied 337.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TAST’s 2024 sales and EPS indicates 3.8% and 14.3% growth, respectively, from the year-ago period’s levels.
Darden Restaurants, Inc. (DRI - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 4.2%, on average. Shares of DRI have increased 10.7% in the past year.
The Zacks Consensus Estimate for DRI’s 2024 sales and EPS indicates 9.9% and 10.9% growth, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 5.8%, on average. The stock has gained 46.9% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS suggests rises of 13.2% and 19.7%, respectively, from the year-ago period’s levels.
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Fortune Brands (FBIN) Q4 Earnings Top, Net Sales Lag, Stock Down
Fortune Brands Innovations, Inc. (FBIN - Free Report) reported mixed results for fourth-quarter 2023, with earnings beating the Zacks Consensus Estimate and net sales missing the same. On a year-over-year basis, net sales increased, but earnings declined.
Despite a challenging macro environment, the company's teams successfully delivered, progressed long-term initiatives and executed on priorities. The company's results this year highlight its focus on surpassing market sales, maintaining margins and generating cash.
In the past year, FBIN has undertaken transformative actions to better leverage the strength of its aligned organization, focusing on leading brands, meaningful innovation and advantaged channel relationships. These actions and a focus on market segments with long-term growth opportunities are likely to drive the company's performance in 2024 and beyond.
Following the earnings release, shares of Fortune Brands lost 0.98% in the after-market trading session on Jan 30.
Inside the Numbers
Non-GAAP earnings per share (EPS) of 95 cents surpassed the Zacks Consensus Estimate of 93 cents by 2.2%. However, the metric declined 11% from $1.07 reported a year ago.
Fortune Brands Innovations, Inc. Price, Consensus and EPS Surprise
Fortune Brands Innovations, Inc. price-consensus-eps-surprise-chart | Fortune Brands Innovations, Inc. Quote
Net sales of $1,161 million missed the consensus estimate of $1,183 million by 1.9%. However, the metric increased 3% from the year-ago quarter’s figure.
The non-GAAP operating income declined 6% year over year to $183.6 million. Non-GAAP operating margin contracted 150 basis points (bps) from the year-ago period’s levels to 15.8% for the quarter.
Segment Discussion
Water Innovations: The segment's net sales of $663 million increased 3% from the prior-year quarter’s levels. The upside can be attributed to the Emtek acquisition. Non-GAAP operating margin contracted 220 bps year over year to 21.8%.
Outdoors: The segment’s net sales declined 7% year over year to $309 million. Segmental non-GAAP operating margin expanded 10 bps year over year to 13.9%.
Security: Net sales of $189 million increased 20% year over year, driven by the U.S. and Canadian Yale and August residential smart locks acquisition. The segment’s non-GAAP operating margin expanded 20 bps year over year to 17.2%.
2023 Highlights
Net sales came in at $4,626 million, down 2% year over year in 2023. Non-GAAP earnings per share came in at $3.91 compared with $4.24 a year ago.
Non-GAAP operating income declined 9% year over year to $738 million. The non-GAAP operating margin contracted 110 bps from the year-ago period’s levels to 16%.
Financials
As of Dec 30, 2023, Fortune Brands reported cash and cash equivalents of $366.4 million compared with $642.5 million at the end of 2023. Net cash provided by operating activities totaled $1.60 billion compared with $566.3 million in 2022.
Long-term debt, as of Dec 30, 2023, was $2,670 million compared with $2,074 million as of 2022 end.
2024 Guidance
For 2024, FBIN expects net sales growth to range between 3.5-5.5%. It also expects the non-GAAP operating margin to be 16.5-17.5%.
Non-GAAP earnings per share are expected to be in the range of $4.20-$4.40.
Zacks Rank & Other Key Picks
Fortune Brands currently carries a Zacks Rank #2 (Buy).
Here are some other top-ranked stocks from the Zacks Retail-Wholesale sector:
Carrols Restaurant Group, Inc. (TAST - Free Report) sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 102% on average. Shares of TAST have rallied 337.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TAST’s 2024 sales and EPS indicates 3.8% and 14.3% growth, respectively, from the year-ago period’s levels.
Darden Restaurants, Inc. (DRI - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 4.2%, on average. Shares of DRI have increased 10.7% in the past year.
The Zacks Consensus Estimate for DRI’s 2024 sales and EPS indicates 9.9% and 10.9% growth, respectively, from the year-ago period’s levels.
Chipotle Mexican Grill, Inc. (CMG - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 5.8%, on average. The stock has gained 46.9% in the past year.
The Zacks Consensus Estimate for CMG’s 2024 sales and EPS suggests rises of 13.2% and 19.7%, respectively, from the year-ago period’s levels.