Fortune Brands Home & Security (FBHS) Tops Q4 EPS by 3c; Offers FY20 EPS Guidance

Fortune Brands Home & Security (NYSE: FBHS) reported Q4 EPS of $1.00, $0.03 better than the analyst estimate of $0.97. Revenue for the quarter came in at $1.5 billion versus the consensus estimate of $1.48 billion.

Highlights from continuing operations:

• Q4 2019 sales increased 4 percent year-over-year to $1.5 billion with EPS of $0.74, an increase of 23 percent; EPS before charges / gains increased 16 percent to $1.00
• Full-year 2019 sales increased 5 percent to approximately $5.8 billion, 6 percent excluding FX, with EPS of $3.06, an increase of 15 percent; EPS before charges / gains increased 8 percent to $3.60
• Company expects full-year 2020 EPS before charges / gains to grow to $3.83 - $4.03 on sales growth of 5 percent to 6 percent

“Our strong results during the fourth quarter reflect our team’s ability to execute well in a housing market with modest growth and tariff challenges,” said Nicholas Fink, chief executive officer, Fortune Brands. “Our Plumbing business continues to outperform its market with exciting consumer-driven innovation and category expansion. The momentum we have in the value price point segment of our Cabinets business is proof our accelerated pivot plans are working. Distribution gains in composite decking products should provide a tailwind for our Doors & Security division during 2020 and beyond. As we look into the next year, we have multiple growth initiatives to pursue in a strengthening market, and we are keenly focused on capturing those opportunities.”

GUIDANCE:

Fortune Brands Home & Security sees FY2020 EPS of $3.83-$4.03, versus the consensus of $3.96.

• The Company expects full-year 2020 sales growth in the range of 5 percent to 6 percent, based on our 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 $3.83 to $4.03.
• For 2020, the Company expects to generate free cash flow of $565 to $585 million.

“Our teams delivered sales and profit growth despite continued market and tariff headwinds,” said Fink. “We believe there will be a better home products market in 2020. We have put in place a prudent plan to generate solid EPS growth in 2020 and could have upside to that plan should U.S. new construction growth exceed expectations, or we generate meaningful additional share gains from the current effects of anti-dumping and countervailing duties on Chinese cabinet imports.”

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

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