Fortune Brands Home & Security (FBHS) Misses Q4 EPS by 7c, Revenues Miss; Offers FY19 EPS Outlook Below Consensus

Fortune Brands Home & Security (NYSE: FBHS) reported Q4 EPS of $0.86, $0.07 worse than the analyst estimate of $0.93. Revenue for the quarter came in at $1.4 billion versus the consensus estimate of $1.47 billion.

• Q4 2018 sales increased 3 percent year-over-year to $1.4 billion with EPS of $0.60, a decline of 28 percent; EPS before charges/gains increased 8 percent to $0.86
• Full-year 2018 sales increased 4 percent with EPS of $2.66, a decline of 13 percent; EPS before charges/gains increased 8 percent to $3.34
• Company expects full-year 2019 EPS before charges/gains to grow to $3.53 - $3.77 on sales growth of 6 - 7.5 percent, and 3 - 5 percent organic growth
• Company will host first investor event in Boston this Wednesday, February 6, 2019

Annual Outlook for 2019

The Company’s 2019 annual outlook is based on a U.S. home products market growth assumption of approximately 2 percent to 4 percent and 2 percent to 4 percent growth for our total global market. The Company expects full-year 2019 sales growth in the range of 6 to 7.5 percent. Excluding acquisitions, the company expects full-year 2019 organic sales growth in the range of 3 to 5 percent.

The Company expects EPS before charges/gains to be in the range of $3.53 to $3.77, the midpoint of which is over 9 percent higher than last year.

“We have built a 2019 plan around a more conservative market, with a soft first half start and modest growth overall for the year. In response, we are managing expenses and capital aggressively, and our teams are prepared to take additional actions if the market grows more slowly than we currently expect,” said Klein. “As a result, we are well-positioned to deliver consistent sales growth and expand margins in 2019—even in a slower growth market.”

GUIDANCE:

Fortune Brands Home & Security sees FY2019 EPS of $3.53-$3.77, versus the consensus of $3.78.

For earnings history and earnings-related data on Fortune Brands Home & Security (FBHS) click here.

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