Fortune Brands, PGT Cite Increases in Second Quarter Including Organic GrowthJuly 29th, 2022 by Travis Rains
With the second quarter closing this week, financial results from across the industry are making headlines. That includes earnings reports from Fortune Brands and PGT Innovations Inc., both of which announced “strong” performances from April through June 2022.
For the second quarter of 2022, Fortune Brands reported sales of $2.1 billion, an increase of 9% over the same period last year. Earnings per share were $1.46 compared to $1.55 one year prior, a 6% decrease, according to a company news release. Operating income fell 4% compared to the second quarter of 2021, from $294.9 million to $284.1 million. However, operating income before charges and gains saw a 7% increase, from $297.5 million last year to $319.8 million in the second quarter of 2022.
The company’s operating margin was 13.5% compared to 15.2% in the second quarter of 2021. The operating margin before charges and gains was 15.1%, while that figure stood at 15.4% in the second quarter of 2021.
With respect to specific Fortune Brands’ segments, outdoors and security sales increased 13%, which the release says was driven by price across all product categories. Sales increased 12% organically, with operating margins before charges and gains recorded at 15.4%, an increase of 70 basis points compared to the second quarter of 2021.
Citing 3% to 5% growth in the global home products market, Fortune Brands expects to deliver an increased full-year sales growth in the range of 6.5% to 7.5%.
“Our teams once again delivered strong results while also advancing key strategic priorities,” says Nicholas Fink, Fortune Brands CEO. “Consumer demand for our products remained resilient as net sales grew solidly, especially considering the stimulus-driven growth during this quarter last year. Additionally, each segment improved its margins sequentially and versus the prior year.”
PGT Innovations Inc. also recently announced net sales totaling $407 million. According to a PGT news release, that’s an increase of 42% and includes organic growth of 29%. Net income increased 240% to $36 million, while the company’s adjusted net income for the second quarter was $41 million, an increase of 278%.
“Our very strong second quarter financial results, with year-over-year revenue growth of 42%, was driven by continued improvement across our portfolio of brands. The effectiveness of our business model to drive long-term and profitable growth, both organic growth and acquisitions, showed strong during the quarter, and included $39 million in net sales from Anlin Windows & Doors, which we acquired in the fourth quarter of last year,” says Jeff Jackson, president and CEO.
Jackson also highlighted the 41% year-over-year organic revenue growth in the company’s western region. The southeast region saw organic revenue grow by 27%, which Jackson says is a reflection of a strong market in Florida and increased operational efficiency. Those factors have led to reduced lead times for PGT, according to the release.
“We achieved 660 basis points of gross margin expansion as operational improvements and pricing actions helped us offset rising costs,” Jackson continues.
The PGT adjusted EBITDA in the second quarter was $78 million, an increase of 119%, and net income attributable to common shareholders per diluted share was $0.61, an increase of 455%.
“Our strong revenue and margin growth benefited from many strategic actions and ongoing strength across the markets we serve,” Jackson says. “Over the past four years, we acquired Western Window Systems, New South, Eco, and Anlin, which together expanded our geographic footprint and product lines so that we can effectively meet growth in consumer demand for our target markets.”