Fortune Brands Home & Security (FBHS) Tops Q4 EPS by 9c, Revenues Beat; Offers FY21 EPS Guidance Above Consensus

February 2, 2021 4:13 PM EST

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Fortune Brands Home & Security (NYSE: FBHS) reported Q4 EPS of $1.25, $0.09 better than the analyst estimate of $1.16. Revenue for the quarter came in at $1.66 billion versus the consensus estimate of $1.62 billion.

  • Share gains and exceptional operational performance in a fundamentally strong end market drove market beating growth across the Company
  • 4Q & Full-Year 2020 sales increased approximately 13 percent and 6 percent, to $1.7 billion and $6.1 billion, respectively, year-over-year
  • 4Q & Full-Year 2020 EPS increased to $1.16 and $3.94 per share; EPS before charges / gains increased 25 percent and 16 percent to $1.25 and $4.19, respectively, year-over-year
  • Company introduces 2021 financial outlook, driven by a solid, long-term outlook for housing, continued share gains and margin expansion

“Strong fourth quarter results capped a remarkable 2020 performance by our teams,” said Nicholas Fink, chief executive officer, Fortune Brands. “Facing unprecedented challenges, we delivered above-market growth and margin acceleration and positioned our Company to continue to deliver share gains and margin improvement in 2021 and beyond. This past year demonstrated that our leading brands and channel positions and differentiated business model produce exceptional results in a variety of demand environments. Importantly, our teams’ ability to execute and remain nimble allows us to capitalize on an increasing set of growth and margin opportunities. Our tireless commitment to serving our customers, keeping people safe and our overall culture of excellence has driven our results. Moving forward, we are well positioned to leverage our Fortune Brands advantaged capabilities across our portfolio to create even more value for all stakeholders.”

“We have used the challenges presented by 2020 to improve the focus and productivity of our business, positioning it for accelerated growth and profitability going forward,” stated Patrick Hallinan, chief financial officer, Fortune Brands. “The efficiency programs undertaken in 2020 have put us ahead of our margin improvement timeline, and we expect to continue toward our goals during 2021. While there may be instances of macro uncertainty and cost inflation in the year ahead, these challenges have been anticipated, and we expect to manage them effectively – as we have in 2020 and in preceding years. We expect another year of strong free cash flow generation in 2021. In 2020, we deployed over $1 billion in M&A, share repurchases, and dividends. We remain laser-focused on driving further value by deploying capital to drive organic growth, M&A, strategic partnerships, and returning excess capital to shareholders.”

GUIDANCE:

Fortune Brands Home & Security sees FY2021 EPS of $4.85-$5.05, versus the consensus of $4.76.

The Company expects full-year 2021 sales growth in the range of 12.5 percent to 14.5 percent, or 5.5 percent to 7.5 percent excluding the LARSON acquisition, based on the Company’s assumption of a total global market expanding by 5 percent to 7 percent, including growth in the U.S. home products market of approximately 5 percent to 7 percent.

The Company expects EPS before charges / gains to be in the range of $4.85 to $5.05.

For 2021, the Company expects to generate free cash flow of approximately $600 to $650 million.

“Our key housing markets are entering a period of long-term expansion,” said Fink. “The current environment has accelerated trends already in place prior to the pandemic and there is renewed consumer focus on the value and role of the home. Our consumers desire larger, multifunctional spaces to combine work, education, and entertainment within the home as well as expanded outdoor living spaces. Demographic forces, combined with very healthy homeowner balance sheets, are driving accelerated activity in the housing industry. Our innovation, leading brands, and premier channel positions, across new construction and repair & remodel, are creating significant opportunities and value for our Company and our stakeholders. With our excellent momentum, strong balance sheet, and advantaged Fortune Brands capabilities, we are very excited about the opportunity to accelerate stakeholder value creation in 2021 and beyond.”

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



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