Fortune Brands Reports Exceptional Sales and Profit Growth in 1Q 2021
Fortune Brands Home & Security, Inc. (the “Company”, or “Fortune Brands”), an industry-leading home and security products company, announced first quarter 2021 results.
Highlights from operations
–Share gains, margin expansion and outstanding operational performance in a fundamentally strong end market drove exceptional growth across the Company
–1Q 2021 sales increased approximately 26 percent to $1.8 billion year-over-year
–1Q 2021 EPS increased 64 percent to $1.26 per share versus the prior-year-quarter; EPS before charges / gains increased 68 percent year-over-year to $1.36
–Company increases 2021 full year financial outlook on continued share gains in a strong demand environment
“Our teams again delivered exceptional above-market results,” said Nicholas Fink, chief executive officer, Fortune Brands. “We continue to outperform in an accelerating home products market at a time when the importance of the home has never been more critical. I am proud of our teams’ effort. We continued to make safety our first priority while working hard to serve our customers. Our upwardly revised outlook reflects our teams’ continued outperformance and ability to capture greater market share and profit opportunities in an increasingly strong market for our products. In addition to driving top-line growth, our Fortune Brands Advantage initiatives are delivering to offset inflation and supply chain headwinds while also freeing up additional investment dollars for our most critical growth priorities. With our attractive categories and strong channel positions, increased investments, and exceptional management team, we are well positioned to drive increasing value for our stakeholders through this period of long-term housing expansion and beyond.”
First Quarter 2021
For the first quarter of 2021, sales were $1.8 billion, an increase of 26 percent over the first quarter of 2020. Earnings per share were $1.26, compared to $0.77 in the prior-year quarter. EPS before charges / gains were $1.36, compared to $0.81 in the prior-year quarter, an increase of 68 percent. Operating income was $248.4 million, compared to $155.0 million in the prior-year quarter. Operating income before charges / gains was $261.8 million, compared to $169.8 million in the prior-year quarter, up 54 percent. Operating margin was 14.0 percent, compared to 11.0 percent in the first quarter of 2020. Operating margin before charges / gains was 14.8 percent, up 270 basis points over the first quarter of 2020.
For each segment in the first quarter of 2021, compared to the prior-year quarter:
–Plumbing sales increased 33 percent, or 30 percent excluding FX, led by strong performance across the business. Operating margin before charges / gains was especially strong at 24.0 percent.
–Cabinets sales increased 11 percent, driven by strong growth across all price points. Operating margin before charges / gains was 10.8 percent, an increase of 180 basis points.
–Outdoors & Security sales increased 47 percent, driven by the addition of LARSON and strong double-digit sales growth of composite decking and doors. Excluding LARSON, organic sales increased 15 percent. Operating margin before charges / gains was 13.5 percent, an increase of 310 basis points.
Balance Sheet and Liquidity
At the end of the quarter, net debt was $2.3 billion and net debt to EBITDA was 2.1x. The Company had $356 million in cash and $755 million of availability under its revolving credit facilities.
Update to Annual Outlook for 2021
The Company expects to continue outperforming a fundamentally strong housing market. The Company now anticipates delivering full-year sales growth in the range of 20 percent to 22 percent, or 13 percent to 15 percent excluding the LARSON acquisition. This reflects the Company’s revised assumptions of a global home products market now expanding by 9 percent to 11 percent, including growth in the U.S. home products market of approximately 10 percent to 12 percent.
The Company now expects EPS before charges / gains for the full year to be in the range of $5.45 to $5.65, which would be an increase at the midpoint of 32 percent versus a year ago.
For 2021, the Company expects to generate free cash flow of approximately $650 to $700 million.
The Company has posted an updated investor presentation on the Fortune Brands website (www.fbhs.com), which includes updated three-year financial targets. Additionally, the Company’s new 2020 ESG report is also available on the Company’s website.
“The U.S. housing market today is considerably underbuilt, and consumers are investing in their homes at historic levels,” said Patrick Hallinan, chief financial officer, Fortune Brands. “We expect the demand for housing will exceed supply for a number of years, and in this environment, we expect to continue accelerating our rate of value creation. We are confident in our ability to navigate inflationary headwinds, while still investing in innovation, brands, and growth capabilities. We expect to translate this growth into strong cash generation and will be working to create additional value through thoughtful capital deployment.”
For the complete press release, click here.
About Fortune Brands
Fortune Brands Home & Security, Inc. (NYSE: FBHS), headquartered in Deerfield, IL., is a Fortune 500 company, part of the S&P 500 Index and a leader in the home products industry. With trusted brands and market leadership positions in each of its three operating segments, Plumbing, Outdoors & Security, and Cabinets, Fortune Brands’ 27,500 associates work with a purpose to fulfill the dreams of home.
The Company’s growing portfolio of complementary businesses and innovative brands include Moen and the House of Rohl within the Global Plumbing Group; outdoor living and security products from Therma-Tru, LARSON, Fiberon, Master Lock and SentrySafe; and MasterBrand Cabinets’ wide-ranging offerings from Mantra, Diamond, Omega and many more. Visit www.FBHS.com to learn more about FBHS, its brands and how the Company is accelerating its environmental, social and governance (ESG) commitments.
Matthew Skelly – Investor & Media Contact – email@example.com – (847) 484-4573
Source: Fortune Brands Home & Security, Inc.