Third Quarter Positive for Fortune Brands Even With ObstaclesOctober 24th, 2019 by Kyra Thompson
Fortune Brands Home and Security (FBHS), parent company of Therma-Tru, saw positive results in the third quarter of 2019. In a sales and earnings per share (EPS) report released yesterday, officials report that the company’s teams, “continued to execute well,” even amid what they’re labeling as a slower market than what was initially foreseen. The company continues to invest in growth, says CEO Chris Klein, while working to overcome what he labels as external pressures, including tariffs.
Company-wide, sales were $1.46 billion in the third quarter, representing a 6% increase from the same quarter last year, while EPS before charges/gains rose 2% from $0.93 to $0.95. Operating income before charges/gains was up to $203.2 million from $190.6 million in the same quarter of 2018 and the operating margin rose slightly to 13.9%.
“We continue to make tremendous progress on our strategic initiatives to capture the most promising opportunities across the businesses and drive outperformance in an environment of more moderate growth,” said current president and chief operating officer Nicholas Fink, who will become the company’s CEO on January 6, 2020.
The doors and security segment saw a sales increase of 11% that the company accredits to the acquisition of Fiberon, an outdoor composite decking manufacturer, which FBHS purchased in August 2018 for about $470 million. Operating margins before charges/gains were 14.5%.
For the current quarter operating income earnings before interest, tax, depreciation and amortization (EBITDA), before charges/gains, the company saw a 3% growth from $236 million to $242.2 million and a year-to-date operating income EBITDA before charges/gains of $672.3 million, a 5% increase over last year.
The company’s 2019 annual outlook, based on home products market growth assumption of 2-2.5%, for the full-year sales growth expectation, is now a range of 5-6%, reflecting the slower ramp-up of demand for building products in the U.S. and a weaker Canadian housing market. For the full year of 2019, FBHS also expects to generate free cash flow of approximately $480 to $500 million.