Strong 2Q Results for Fortune BrandsJuly 30th, 2020 by Editor
Fortune Brands Home & Security Inc., a home and security products company, recently announced second quarter 2020 results that included a nine percent drop in doors and security sales, though doors and decking exceeded expectations and security products challenged by effects of COVID-19 on its supply chain.
“I couldn’t be prouder of our teams,” said Nicholas Fink, chief executive officer, Fortune Brands. “I want to thank all of our dedicated team members who worked so hard in a challenging environment to keep our facilities safe and open. During an extremely tough and uncertain time, we performed exceptionally in a home products market that was and remains stronger than expected. We went above and beyond recommended guidelines and took care of our associates and partners in a way which led to our strong performance. Our teams’ operational excellence was reflected in our financial results and our service to our customers, which resulted in accelerated share gains and produced future opportunities.”
Earnings per share were $0.83, compared to $0.97 in the prior-year quarter. Operating income was $173.0 million, compared to $202.4 million in the prior-year quarter.
“We executed our plans to permanently reposition the cost basis of the Company against a home products market that exceeded expectations in the second quarter. We gained share and executed efficiency improvements which not only drove sales and profit results in the quarter but positions us to invest for long-term profitable growth,” added Fink.
Mentioned during the 2020 first quarter earnings press release and earnings call in late April, the company, in cooperation with its lending group, executed a supplemental 364-day revolving credit facility. This supplemental facility increased borrowing capacity by $400 million and operates essentially under the same terms and conditions as the existing facility.
“We set ambitious efficiency goals and are exceeding our objectives,” said Patrick Hallinan, chief financial officer. “In addition to expense and cash management improvement initiatives being pursued throughout the company, we have positioned the businesses for additional share gains on the top line. We also have enhanced liquidity via strong cash generation. We are even better situated today to capture any potential upside and to manage any potential further softness than we were three months ago.”
Due to the uncertainty caused by the high unemployment and recession resulting from the pandemic, Fortune Brands is maintaining suspension of any previous financial guidance and projections for 2020 and beyond.
“We are pleased with the resilience in market conditions and are positioned advantageously for the back half of the year and into 2021. We continue to see encouraging levels of R&R spending and rising activity in new construction. We are acutely aware of the uncertainty that exists with high unemployment in the U.S. and COVID-19 and will remain prudent in our management of the business as we continue to position ourselves to perform well in a downturn and accelerate in a recovery,” concluded Fink.