Fortune Brands: Q4 Sales Miss Estimates, Earnings Underperform
Key Metrics:
* Revenue: $1.10 billion (4.9% YoY decline, 3.5% miss)
* EPS (GAAP): $0.84 (20.1% miss)
* Adjusted EBITDA: $227.2 million (6.2% miss)
* EPS (GAAP) guidance for FY2025: $4.30 (4.2% miss)
* Operating Margin: 16.1% (4.6% YoY increase)
* Free Cash Flow Margin: 19.2% (12% YoY increase)
* Organic Revenue: -1% YoY (-4.6% in Q4 CY2023)
Company Overview:
Fortune Brands produces plumbing, security, and outdoor living products for residential and commercial customers.
Sales Growth:
Over the last five years, Fortune Brands has experienced mediocre revenue growth of 6.4%. This quarter's revenue missed estimates, declining 4.9% YoY. Analysts predict 3.6% revenue growth over the next 12 months.
Profitability:
* Operating Margin: 16.1%, down 6.1 percentage points over the past five years.
* EPS (GAAP): $0.84, up from $0.64 in Q4 CY2023 but missing analyst estimates. Over the last five years, EPS has grown at a compound annual rate of 4.2% (lower than revenue growth), indicating reduced profitability per share.
Key Takeaways:
* Narrow beat of organic revenue expectations.
* Significant miss on full-year EPS guidance.
* Revenue fell below Wall Street's estimates.
* Stock price fell 3% post-earnings release.
Conclusion:
Fortune Brands' Q4 results were mixed. While revenue exceeded organic expectations, overall earnings underperformed. Investors should evaluate the company's valuation, business qualities, and recent performance before making investment decisions. A full research report is available here for further analysis.