Fortune Brands Reports Strong Sales, Profit and EPS Growth in 4Q and Full Year 2021
Fortune Brands Home & Security, Inc. (the “Company”, or “Fortune Brands”), an industry-leading home and security products company, today announced fourth quarter and full-year 2021 results.
- 4Q and Full-Year 2021 sales increased 18 percent and 26 percent year-over-year, respectively, to $2.0 billion and $7.7 billion
- 4Q and Full-Year 2021 EPS increased to $1.28 and $5.54; EPS before charges / gains increased 6 percent and 37 percent year-over-year, respectively, to $1.32 and $5.73
- Company introduces 2022 financial guidance, driven by a positive long-term outlook for housing, enhanced growth initiatives and further margin expansion
“Our teams’ ability to execute, in any environment, enabled us to deliver strong results for our leading brands, channel partners and consumers. To produce these results during a challenging operating backdrop is extraordinary,” said Nicholas Fink, chief executive officer, Fortune Brands. “Demand remains robust across our portfolio, and we expect housing market strength to persist in 2022 and beyond. In 2021, we made tremendous progress towards our strategic objectives, including further development of our core Fortune Brands Advantage capabilities, to generate incremental investment dollars and accelerate our margin progression. We continue to create value across the portfolio and are positioned to continue to outperform as we further invest in our brands, innovation, digital capabilities and people. I am very excited for the future of the Company and all the good that we can create as we work toward our purpose – Fulfilling Dreams of Home.”
Fourth Quarter 2021
For the fourth quarter of 2021, sales were $2.0 billion, an increase of 18 percent over the fourth quarter of 2020. Earnings per share were $1.28, compared to $1.16 in the prior-year quarter, an increase of 10 percent. EPS before charges / gains were $1.32, compared to $1.25 the same quarter last year, an increase of 6 percent. Operating income was $260.5 million, compared to $233.2 million in the prior-year quarter, an increase of 12 percent. Operating income before charges / gains was $263.7 million, compared to $246.4 million the same quarter last year, up 7 percent. Operating margin was 13.3 percent, compared to 14.1 percent in the fourth quarter of 2020. Operating margin before charges / gains was 13.4 percent, compared to 14.8 percent in the fourth quarter of 2020.
For each segment in the fourth quarter of 2021, compared to the prior-year quarter:
- Plumbing sales increased 10 percent, or 9 percent excluding FX, led by U.S. wholesale and the House of Rohl. Operating margin before charges / gains was 20.8 percent.
- Outdoors & Security sales increased 40 percent, or 17 percent organically, driven by the addition of LARSON and double-digit sales growth in decking, doors and security. Operating margin before charges / gains was 15.9 percent.
- Cabinet sales increased 14 percent, driven by growth across products at all price points. Operating margin before charges / gains was 8.9 percent.
Full Year 2021
For the full year 2021, sales were $7.7 billion, an increase of approximately 26 percent over 2020. Earnings per share were $5.54 compared to $3.94 in the prior year, an increase of 41 percent. EPS before charges / gains were $5.73 versus $4.19 last year, an increase of 37 percent. Operating income was $1.1 billion, compared to $801.4 million in the prior year, an increase of 36 percent. Operating income before charges / gains was $1.1 billion, compared to $857.1 million during the previous year, up 30 percent. Operating margin was 14.2 percent, compared to 13.2 percent in 2020.
Operating margin before charges / gains was 14.6 percent, up 50 basis points over full year 2020.
“Our teams’ performance was exemplary in 2021,” stated Patrick Hallinan, chief financial officer, Fortune Brands. “In spite of significant cost inflation, and labor and supply chain challenges, we produced 50 basis points of operating margin improvement. Further, we invested an incremental $85 million in brands, innovation and capabilities during the year. As we start 2022, we face headwinds similar to those present in 2021. However, we are confident we will overcome these headwinds and expect to outgrow the market and expand our margins. Our 2022 financial guidance reflects a continued strong market backdrop, share gains and continued margin progression. Our guidance also reflects attractive growth investments, which prioritize projects providing sustainable growth with accretive returns. We are optimistic about the year ahead and will remain agile in responding to any short-term headwinds that may materialize.”
Balance Sheet and Liquidity
At the end of the year, net debt was $2.2 billion and net debt to EBITDA was 1.7x. The Company had $472 million in cash and $730 million of availability under its revolving credit facility.
During the fourth quarter, the Company repurchased approximately $178 million in common stock and for the full year, repurchased approximately $448 million in common stock.
Annual Outlook for 2022
The Company expects to continue outperforming a fundamentally strong housing market. The Company expects full-year 2022 sales growth in the range of 5.5 percent to 7.5 percent based on the Company’s assumption of a total global market expanding by 3 percent to 5 percent, including growth in the U.S. home products market of approximately 4 percent to 6 percent.
The Company expects EPS before charges / gains to be in the range of $6.35 to $6.55.
For 2022, the Company expects to generate free cash flow of approximately $615 to $700 million.
“We expect the long-term expansion of housing to continue,” said Fink. “Demographic forces continue to support housing formation and growth, which will drive both single-family new construction and repair and remodel investment for a number of years. Existing housing stock is low and is aged, and homeowner equity is trillions of dollars higher compared to a year ago. Consumers are increasingly turning to products built with innovation, sustainability and purpose. Our portfolio of leading brands is squarely aligned with these trends, and we will continue to drive initiatives to fulfill our purpose.”
For the full fourth quarter results, 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 – firstname.lastname@example.org – (847) 484-4573
Source: Fortune Brands Home & Security, Inc.