Fortune Brands Announces Third Quarter Results, Taking Action to Revitalize the Company's Performance

Jesse Singh, Chief Executive Officer of Fortune Brands Innovations, Inc.

“Fortune Brands is in the early stages of a multi-year turnaround plan to get Back to Business. We are building from a strong foundation of brands that consumers and pros know and trust. Third quarter results were in line with our outlook excluding the tax and tariff benefits, but not where they need to be. Our biggest challenge has been our own execution, and we are taking aggressive steps to drive improvement”

Jesse Singh, Chief Executive Officer of Fortune Brands Innovations, Inc.

“Service levels improved 10 percentage points in the third quarter, with fill rates in the high-90% range entering the fourth quarter. We have realigned the organization around customer-focused segments and expect to have more than 80% of our salaried workforce directly supporting a specific business by year end, up from roughly 40% at the start of the year. In addition, we have strengthened the leadership team with a new Chief Financial Officer, Chief Information Officer and Chief Legal Officer, and new leaders within each of our businesses. We remain on track for $70 million of annualized SG&A savings by the first quarter of 2027. We also entered into a purchase agreement to sell Fiberon, are exiting our commercial operations in China, which we expect to be completed by the third quarter of 2027 and are rationalizing the EMEA operating footprint of a business in our Water segment, which we expect to be completed by the fourth quarter of 2027. Together these businesses generate an annualized operating loss of approximately $50 million to $55 million on revenue of $320 million to $330 million.”

Jesse Singh, Chief Executive Officer of Fortune Brands Innovations, Inc.

“In the fourth quarter, we expect incrementally lower revenue, driven by three things: lower sales from the businesses involved in the portfolio optimization actions, incremental softening in single-family new construction, and a reduction in channel inventory. We are using this quarter’s net tax benefit to fund additional portfolio and alignment actions in the fourth quarter. The work ahead is substantial, but the opportunity is large: we have leading brands, customers and channel partners who want to win with us, and a team that is engaged and moving with urgency. I am confident that our actions will build a stronger, simpler and more customer-focused company that delivers consistent growth, margin expansion and shareholder value over the long term.”

Pete Clifford, Chief Financial Officer of Fortune Brands Innovations, Inc.

“Looking ahead, we see a softer environment for single-family new construction and expect this part of the market to be down mid to high single digits, with R&R down low single digits for the year. Customers are signaling greater caution and we are taking a more conservative approach to channel inventory given the uncertain macroeconomic environment. We have also made important decisions on dilutive parts of our portfolio, which we expect will help improve future profitability. Those businesses will continue to have an impact on our results for the fourth quarter and the first half of next year. With these factors in mind, we are prudently updating our guidance for net sales and EPS before charges / gains. Fourth quarter and full year net sales are expected to be in the range of $925 million to $995 million and $4,205 million to $4,275 million, respectively. Fourth quarter and full year EPS before charges / gains is expected to be in the range of $0.19 to $0.29 and $3.20 to $3.30, respectively. We also expect full year operating cash flow and free cash flow to be in the range of $480 million to $500 million and $380 million to $410 million, respectively.”

Pete Clifford, Chief Financial Officer of Fortune Brands Innovations, Inc.

“While these actions will weigh on our near-term results, they position us to enter 2027 on stronger footing.”