Fortune Brands Delivers Solid 2023 Sales and Margin Performance with Strong Cash Generation

Q4 2023 sales were $1.2 billion, an increase of 3 percent over Q4 2022. Organic sales excluding the impact of the non-reoccurring 53^rd week and FX were $1.1 billion, a decrease of 3 percent versus Q4 2022

Q4 2023 earnings per share (EPS) were $0.64, a decrease of 35 percent versus a year ago; EPS before charges / gains were $0.95, a decrease of 11 percent versus Q4 2022, reflecting the impact of one-time separation items and the 53^rd week

Full-year 2023 sales were $4.6 billion, a decrease of 2 percent over 2022. Organic sales excluding the impact of the non-reoccurring 53^rd week and FX were $4.4 billion, a decrease of 6 percent versus full year 2022

Full-year 2023 EPS were $3.17, a decrease of 23 percent versus 2022; EPS before charges / gains were $3.91, a decrease of 8 percent versus 2022, reflecting the impact of one-time separation items and the 53^rd week

Company announces new $650 million share repurchase authorization reflecting confidence in outlook and commitment to driving long-term shareholder value

Company provides 2024 guidance prioritizing above-market sales performance, margin expansion and continued cash generation

Fortune Brands Innovations, Inc. (“Fortune Brands” or the “Company”), an industry leading innovation company focused on creating smarter, safer and more beautiful homes and lives, announced fourth quarter and full-year 2023 results.

“Our results this year demonstrate our focus on generating sales above the market, preserving margins, and generating cash. Our teams delivered in the face of a challenging macro environment while also advancing several long-term initiatives and executing on our priorities,” said Fortune Brands Chief Executive Officer Nicholas Fink. “Over the past year, we have taken transformative actions toward better leveraging the strength of our aligned organization and sharpening our focus on our leading brands, meaningful innovation, and our advantaged channel relationships. These actions combined with our focus on the parts of the market with long-term outsized growth opportunities, give me confidence in our ability to perform in 2024 – and beyond.”

Fourth Quarter 2023 Results

Segment results were impacted by lower sales volumes and the non-reoccurring 53^rd week. Water Innovations sales increased due to the Emtek acquisition. Security sales increased driven by the U.S. and Canadian Yale and August residential smart locks acquisition. Earnings per share year-over-year results were impacted by one-time items related to the Cabinets separation and the impact of the 53^rd week.

Full-Year 2023 Results

Segment results were impacted by lower volumes. Sales results in Water Innovations and Security were partially offset by the impact of the recent acquisition. Full-year operating margins were impacted by first half inventory actions, particularly in Water Innovations and Outdoors. Earnings per share year-over-year results were impacted by one-time items related to the Cabinets separation and the impact of the 53^rd week.

Balance Sheet and Cash Flow

The Company exited the year with a strong balance sheet, closing with $1.1 billion in operating cash flow and $799 million in free cash flow. Due to its continued strong cash flow, the Company repurchased $20 million of shares in the quarter, bringing the full year total to $150 million. The Company finished the year with full availability on its revolver and continues to de-lever from its recent transformative acquisition.

Share Repurchase Authorization

The Company announced that on January 29, 2024, its Board of Directors authorized the repurchase of up to $650 million of shares of the Company’s outstanding common stock over the next two years on the open market or in privately negotiated transactions or otherwise (including pursuant to a Rule 10b5-1 trading plan, block trades and accelerated share repurchase transactions), in accordance with applicable securities laws. The $650 million share repurchase authorization announced today is in addition to the $435 million remaining from an existing authorization which expires on March 1, 2024.

The new purchases, if made, will occur from time to time depending on market conditions. The newly announced share repurchase authorization does not obligate the Company to repurchase any dollar amount or number of shares of common stock. This authorization is in effect until January 29, 2026, and may be suspended or discontinued at any time.

2024 Market and Financial Guidance

“Our full year 2024 financial guidance reflects our expectation of outperformance as we execute our strategy of growing the core and accelerating connected products, and the defined pathway we see toward margin growth,” said Fortune Brands Chief Financial Officer David Barry. “As we position Fortune Brands for continued shareholder value creation, we will prioritize above-market sales growth opportunities, margin expansion and cash generation, while continuing to invest in key strategic priorities with a returns-focused view. The share repurchase authorization that we announced today reflects our continued confidence in the strength of our business and focus on long-term performance.”

For the full fourth quarter results, click here.

About Fortune Brands Innovations

Fortune Brands Innovations, Inc. (NYSE: FBIN), headquartered in Deerfield, Ill., is a brand, innovation and channel leader focused on exciting, supercharged categories in the home products, security and commercial building markets. The Company’s growing portfolio of brands includes Moen, House of Rohl, Aqualisa, Emtek, Therma-Tru, Larson, Fiberon, Master Lock, SentrySafe, Yale and August. To learn more about FBIN, its brands and environmental, social and governance (ESG) commitments, visit www.FBIN.com.

Contact:

Leigh Avsec – Media & Investor Relations – Investor.Questions@fbhs.com – (847) 484-4211

Source: Fortune Brands Innovations, Inc.