Financial Performance - For the year ended December 28, 2024, total net sales were $4,609.0 million, a decrease of 0.4% compared to 2023[130]. - Operating income increased by 20.0% to $737.9 million in 2024, primarily due to acquisitions and cost deflation[138]. - The Water segment reported net sales of $2,564.6 million, a slight increase of 0.1% from 2023[138]. - International market sales declined by $136.7 million, impacting overall net sales negatively[135]. - Net sales decreased by $96.8 million, or 2.0%, primarily due to lower sales unit volume in the U.S. and unfavorable foreign exchange of approximately $24 million[159]. - Operating income decreased by $159.4 million, or 20.6%, attributed to lower sales unit volume, manufacturing inefficiencies, and higher restructuring costs[165]. - Net sales in the Water segment decreased by $8.0 million, or 0.3%, due to lower organic sales unit volume and unfavorable foreign exchange of approximately $24.4 million[172]. - Operating income in the Outdoors segment decreased by $60.7 million, or 31.3%, due to asset impairment charges of $33.5 million and lower net sales[175]. - Net sales in the Security segment increased by $87.5 million, or 13.8%, primarily due to the acquisition of the Yale and August Business[176]. Expenses and Costs - Selling, general and administrative expenses rose by 6.1% to $1,226.5 million, driven by acquisitions and increased marketing costs[142]. - Selling, general and administrative expenses increased by $90.5 million, or 8.4%, due to the impact from the acquisition of the Acquired Businesses and higher headcount-related costs[161]. - Corporate expenses increased by $25.4 million, or 19.6%, primarily due to costs related to the acquisition of the Acquired Businesses[178]. - Interest expense decreased by $2.7 million, or 2.3%, due to lower interest on floating rate debt[166]. Acquisitions and Investments - The acquisition of Wise Water Solutions LLC. was completed for $105.6 million, contributing to the Water segment's performance[127]. - The company plans to continue investing in organic growth initiatives and strategic acquisitions to enhance shareholder value[131]. - The company acquired SpringWell for $105.6 million in February 2024, and the results are reported as part of the Water segment[196]. - The company completed the acquisition of the Acquired Businesses from ASSA for approximately $813.9 million in June 2023[197]. - The company invested approximately $60 million in incremental capacity in 2024 and expects capital spending in 2025 to be between $100 million and $140 million[191]. Cash Flow and Debt - The net cash provided by operating activities was $667.8 million in 2024, a decrease of $388.0 million from 2023[201]. - The company used $302.9 million in investing activities in 2024, significantly lower than $1,037.8 million in 2023, primarily due to lower acquisition costs[202]. - The company had aggregate outstanding notes of $2.7 billion as of December 30, 2023[184]. - The company entered into a $1.25 billion revolving credit facility with a maturity date of August 2027, with no outstanding borrowings as of December 28, 2024[185]. - As of December 28, 2024, the company had cash and cash equivalents of $381.1 million, with $335.4 million held at non-U.S. subsidiaries[191]. - Debt payments due in the next five years include $500 million in 2025 and $1.5 billion in 2030 and beyond[210]. Tax and Liabilities - The effective income tax rate for 2024 was adversely affected by state and local taxes and foreign income taxed at higher rates[148]. - As of December 28, 2024, liabilities for unrecognized tax benefits pertaining to uncertain tax positions totaled $25.2 million, with a reasonable possibility of a decrease by $6.1 million in the next 12 months[241]. - The company has contractual obligations of $545.1 million as of December 28, 2024, with $522.4 million due within one year[207]. Pension and Actuarial Information - The weighted-average long-term expected rate of return on pension plan assets was 7.3% for 2024, compared to 6.1% for 2023[235]. - The weighted-average discount rate for defined benefit liabilities was 5.7% as of December 28, 2024, compared to 5.0% as of December 30, 2023[236]. - Total pension cost for 2024 was $11.6 million, with an actuarial loss component of $18.5 million[238]. - The actual gain on plan assets in 2024 was 0.3%, compared to an actuarial assumption of an average 7.3% expected return[238]. - A 25 basis point change in the discount rate assumption would lead to an increase or decrease in pension and postretirement liability of approximately $6 million[239]. - The assumed rate of increase for postretirement medical and prescription drugs for pre-65 retirees decreased from 7.3% in 2023 to 7.1% in 2024[237]. Inventory and Impairments - Inventory provision was $69.3 million and $75.8 million as of December 28, 2024, and December 30, 2023, respectively[216]. - No material impairments related to long-lived assets were recorded in 2024, 2023, or 2022[218]. - Pre-tax impairment charges of $28.0 million and $5.5 million were recorded for two indefinite-lived tradenames in the Outdoors segment during the fourth quarter of 2023[229]. - The fair value of indefinite-lived tradenames was $518.8 million as of December 28, 2024, with $215.6 million in the Water segment, $271.2 million in the Outdoors segment, and $32.0 million in the Security segment[228].

Group 1 - The core thesis for investing in Fortune Brands Innovations (NYSE: FBIN) is based on the expectation that FY25 will be a growth year due to an improved outlook for the housing market [1] - The investment strategy focuses on identifying undervalued companies with long-term growth potential, emphasizing a blend of value investing principles and long-term growth [1] - The approach involves purchasing quality companies at a discount to their intrinsic value and holding them to allow for compounding of earnings and shareholder returns [1]

Financial Data and Key Metrics Changes - For Q4 2024, net sales were $1.1 billion, a 5% decrease compared to Q4 2023, impacted by a third-party software outage, hurricanes, and softness in China [17][66] - Adjusted for these impacts, Q4 organic sales were down 1%, while EPS for Q4 were $0.98, a 3% increase from Q4 2023 [18][66] - Full-year 2024 net sales were $4.6 billion, flat compared to 2023, with full-year organic sales down 5% or 2% excluding China and the one-time disruption [19][66] - Full-year operating margins increased by 90 basis points to 16.9%, with EPS at $4.12, up 5% over 2023 [21][66] - Free cash flow for 2024 was approximately $475 million, with a cash conversion of over 100% of net income [20][66] Business Line Data and Key Metrics Changes Water Innovations - Q4 sales were $645 million, down 3%, but organic sales were up 2% when excluding China and hurricane impacts [67][68] - Full-year sales were flat, with organic sales down 2% excluding the same impacts, and operating margin at 23.7% for Q4 [68][69] Outdoors - Q4 sales were $303 million, down 2%, while full-year sales were up 1% [72][73] - Operating margin for the outdoor segment was 18.2% in Q4, an increase of 430 basis points [73] Security - Q4 sales were $157 million, down 17%, or down 10% when adjusting for the software outage [55][75] - Full-year sales decreased 4% to $694 million, with organic sales down around 10% when adjusting for the outage [75][76] Market Data and Key Metrics Changes - The overall market for the company's products is expected to remain dynamic, with the R&R market stabilizing but still negative [38][41] - The single-family new construction market is expected to be flat in 2025, with incomplete low single-digit growth anticipated [39] Company Strategy and Development Direction - The company is focusing on high-growth and profitable opportunities, simplifying its organization, and enhancing its digital business [8][10] - Strategic investments in brand building, innovation, and digital transformation are expected to drive future growth [10][12] - The company aims to leverage its digital capabilities and partnerships to enhance sales and market presence [27][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform in 2025 and beyond, despite a challenging macro environment [10][16] - The company is preparing for potential supply chain disruptions and has reduced tariff exposure from China [34][35] - Management highlighted the importance of brand strength and innovation in navigating current market challenges [36][37] Other Important Information - The board approved a new $1 billion share repurchase authorization, reflecting confidence in cash generation and long-term shareholder value [22] - The company has made significant progress in its digital business, with 214 million in digital sales and a strong user base growth [23][24] Q&A Session Summary Question: What are the expectations for the digital business in 2025? - Management expects digital sales to contribute significantly to growth, with a path towards $100 million in annualized sales for the Flow business in 2025 [27][30] Question: How is the company addressing the challenges in the security segment? - Management acknowledged the performance issues in the security segment and outlined plans for improvement, including a major branding campaign for Master Lock [56][78]

Core Insights - Fortune Brands Innovations (FBIN) reported $1.1 billion in revenue for Q4 2024, a year-over-year decline of 4.9% [1] - The company's EPS for the same period was $0.98, slightly up from $0.95 a year ago [1] - Revenue fell short of the Zacks Consensus Estimate of $1.15 billion, resulting in a surprise of -3.61% [1] - EPS also missed the consensus estimate of $1.05, with a surprise of -6.67% [1] Revenue Performance - Net Sales in the Outdoors segment were $303 million, below the average estimate of $307.14 million, reflecting a year-over-year decline of 2% [4] - Net Sales in the Security segment were $157 million, significantly lower than the average estimate of $173.36 million, marking a year-over-year decline of 17% [4] - Net Sales in the Water segment were $645 million, slightly below the average estimate of $660.52 million, representing a year-over-year change of -2.7% [4] Operating Income Analysis - Non-GAAP Operating Income for the Water segment was $152.50 million, compared to the average estimate of $154.92 million [4] - Non-GAAP Operating Income for the Outdoors segment was $55.20 million, slightly below the average estimate of $56.66 million [4] - Non-GAAP Operating Income for the Security segment was $14.60 million, significantly lower than the average estimate of $22.26 million [4] - Total Corporate Expenses were reported at -$40.70 million, worse than the average estimate of -$37.85 million [4] Stock Performance - Shares of Fortune Brands Innovations have remained unchanged over the past month, while the Zacks S&P 500 composite increased by 2.1% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Fortune Brands Innovations (FBIN) reported quarterly earnings of $0.98 per share, missing the Zacks Consensus Estimate of $1.05 per share, but showing an increase from $0.95 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -6.67%, with the company previously expected to post earnings of $1.15 per share but actually reporting $1.16 per share in the prior quarter, resulting in a positive surprise of 0.87% [2] - Revenues for the quarter ended December 2024 were $1.1 billion, missing the Zacks Consensus Estimate by 3.61%, and down from $1.16 billion year-over-year [3] - Over the last four quarters, the company has surpassed consensus EPS estimates three times but has only topped revenue estimates once [3] Stock Performance and Outlook - Since the beginning of the year, Fortune Brands Innovations shares have increased by approximately 1.5%, compared to a 3.1% gain in the S&P 500 [4] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [5] Earnings Estimate Revisions - The trend for earnings estimate revisions ahead of the earnings release was favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [7] - The current consensus EPS estimate for the upcoming quarter is $0.87 on revenues of $1.11 billion, and for the current fiscal year, it is $4.53 on revenues of $4.78 billion [8] Industry Context - The Retail - Home Furnishings industry, to which Fortune Brands Innovations belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Financial Performance - Q4 2024 sales were $1.1 billion, a decrease of 5% compared to Q4 2023; organic sales excluding the impact of China and one-time disruptions were down 1%[3] - Q4 2024 earnings per share (EPS) were $0.84, an increase of 31% year-over-year; EPS before charges/gains were $0.98, an increase of 3% compared to Q4 2023[3] - Full-year 2024 sales were $4.6 billion, flat compared to 2023; organic sales excluding the impact of China and one-time disruptions were down 2%[3] - Net income for the fifty-two weeks ended December 28, 2024, increased to $471.9 million, up 16% from $404.5 million in the previous year[33] - The company reported a total GAAP net sales of $4,609.0 million for the fifty-two weeks ended December 28, 2024, compared to $4,626.2 million in the previous year[48] Cash Flow and Debt Management - The company generated $668 million of operating cash flow and $475 million of free cash flow for the full year, representing over a 100% cash conversion ratio[9] - The company exited Q4 2024 with net debt of $2.3 billion and a net debt to EBITDA ratio of 2.4x[10] - Long-term debt decreased to $2,173.7 million from $2,670.1 million, indicating improved financial leverage[27] - Free cash flow for the fifty-two weeks ended December 28, 2024, was $474.5 million, a decrease of 41% from $799.3 million in the prior year, with an estimated range of $580 to $620 million for 2025[30] - The cash conversion ratio for the fifty-two weeks ended December 28, 2024, was 101%, with an estimated range of 115% to 125% for 2025[30] Shareholder Value and Future Guidance - The company announced a new $1 billion share repurchase authorization, reflecting confidence in cash generation and commitment to long-term shareholder value[3] - Full-year 2025 guidance indicates net sales growth of flat to 3% and EPS before charges/gains between $4.15 and $4.45[15] - The company expects the global market to decline by 2% to 1% and the China market to decline by 15% to 10% in 2025[14] Segment Performance - Water Innovations segment reported net sales of $2.565 billion for 2024, with an operating margin of 23.2%[8] - The Water segment reported net sales of $644.6 million, down $18.4 million or 3% year-over-year, while the Outdoors segment saw a decrease of $6.2 million or 2% to $303.0 million[24] - The Security segment experienced a significant decline in operating income before charges/gains, dropping to $14.6 million, down $18.0 million or 55% from $32.6 million in the previous year[25] - The Outdoors segment saw a significant operating income increase of 641% to $54.1 million for the thirteen weeks ended December 28, 2024, from $7.3 million in the prior year[43] Operating Income and Margins - Operating income before charges/gains for the total company was $181.6 million for the thirteen weeks ended December 28, 2024, a decrease of $2.0 million or 1% compared to $183.6 million in the prior year[25] - Operating income increased by 33% to $178.3 million for the thirteen weeks ended December 28, 2024, compared to $134.0 million in the same period of 2023[43] - The company reported a total operating income of $737.9 million for the fifty-two weeks ended December 28, 2024, representing a 20% increase from $614.9 million in the previous year[43] - Operating margin for the total company improved by 460 basis points to 16.1% for the thirteen weeks ended December 28, 2024, compared to 11.5% in the same period of 2023[46] Asset Management - Total assets as of December 28, 2024, were $6,561.8 million, a slight decrease from $6,565.0 million as of December 30, 2023[27] - Cash and cash equivalents increased to $381.1 million from $366.4 million year-over-year, reflecting a positive cash flow position[27] - The company reported a total equity of $2,422.0 million, up from $2,293.4 million, showing a strengthening balance sheet[27] Charges and Impairments - The company experienced a significant reduction in asset impairment charges, reporting none for the fifty-two weeks ended December 28, 2024, compared to $33.5 million in the previous year[33] - Restructuring charges decreased by 39% to $2.2 million for the thirteen weeks ended December 28, 2024, from $3.6 million in the same period of 2023[44] - Other charges decreased significantly by 88% to $1.1 million for the thirteen weeks ended December 28, 2024, compared to $9.4 million in the prior year[44] Sales Trends - Total net sales for the thirteen weeks ended December 28, 2024, were $1,104.1 million, a decrease of $57.2 million or 5% compared to $1,161.3 million for the same period in 2023[24] - The company reported a 5% decrease in net sales for the fifty-two weeks ended December 28, 2024, totaling $4.609 billion, compared to $4.626 billion in the previous year[33] - Organic net sales excluding the impact of acquisitions for the total company decreased by $64.0 million, or 6%, for the thirteen weeks ended December 28, 2024[48] - The Security segment experienced a significant decline, with GAAP net sales down by $32.6 million, or 17%, for the thirteen weeks ended December 28, 2024[48]

Core Viewpoint - Fortune Brands Innovations, Inc. (FBIN) is expected to report its fourth-quarter results on February 6, 2024, with earnings per share (EPS) estimates showing a potential increase from the previous year despite anticipated revenue declines due to market challenges [1][3]. Financial Performance - In the last reported quarter, FBIN's adjusted earnings exceeded the Zacks Consensus Estimate, while sales fell short, with year-over-year earnings and sales decreasing by 3% and 8%, respectively [2]. - The Zacks Consensus Estimate for FBIN's EPS has risen to $1.05, reflecting a 10.5% increase from the previous year, while total revenue is estimated at $1.15 billion, indicating a 1.4% decrease year-over-year [3]. Market Conditions - The decline in FBIN's top line is attributed to ongoing softness in the residential market, driven by high mortgage rates and macroeconomic challenges, which have constrained consumer spending on home improvement products [4]. - Although FBIN has reduced its exposure to China, the prolonged real estate downturn in the region poses a significant risk to its earnings, likely impacting the upcoming quarter's performance [5]. Competitive Landscape - FBIN faces price competition from low-quality alternatives, particularly in categories like security safes and water products, which has affected its quarterly performance [6]. - The company is responding with targeted marketing to emphasize the quality and reliability of its brands [6]. Strategic Focus - FBIN's emphasis on high-margin, digitally enabled products, such as the Flo Smart Water Monitor, is expected to help mitigate top-line weaknesses, with strong traction noted in the third quarter [7][9]. - The company's luxury brands under House of Rohl are well integrated into its portfolio, and reconstruction activities following natural disasters could drive demand for its products [7]. Segment Performance - The Zacks Consensus Estimate for the Outdoor segment sales is $307 million, a slight decline from $309 million a year ago. The Security segment is estimated at $173 million, down from $189 million, while the Water segment is pegged at $661 million, a minor decline from $663 million [8]. Earnings Prediction - The model predicts an earnings beat for FBIN, supported by a positive Earnings ESP of +2.10% and a Zacks Rank of 2 (Buy) [11].

Core Insights - Analysts project that Fortune Brands Innovations (FBIN) will report quarterly earnings of $1.05 per share, reflecting a year-over-year increase of 10.5% [1] - Revenue is expected to reach $1.15 billion, indicating a decline of 1.4% from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, suggesting a reassessment of projections by covering analysts [1] Revenue Projections - Analysts forecast 'Net Sales- Outdoors' to be $307.14 million, representing a year-over-year change of -0.7% [3] - The consensus estimate for 'Net Sales- Security' is $173.36 million, indicating a decline of 8.3% from the prior-year quarter [4] - 'Net Sales- Water' is projected to reach $660.52 million, reflecting a change of -0.4% from the year-ago quarter [4] Operating Income Estimates - The estimated 'Operating Income(loss) before charges/gains (Non-GAAP)- Water' is $154.92 million, up from $144.30 million in the previous year [5] - 'Operating Income(loss) before charges/gains (Non-GAAP)- Outdoors' is expected to be $56.66 million, compared to $42.90 million a year ago [5] - The average prediction for 'Operating Income(loss) Before Charges/Gains (Non-GAAP)- Security' is $22.26 million, down from $32.60 million reported in the same quarter last year [6] Stock Performance - Shares of Fortune Brands Innovations have increased by 1.5% over the past month, compared to a 1.7% increase in the Zacks S&P 500 composite [6] - With a Zacks Rank 2 (Buy), FBIN is anticipated to outperform the overall market in the near future [6]

Fortune Brands Innovations (FBIN) closed the last trading session at $68.96, gaining 0.9% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $86.46 indicates a 25.4% upside potential.The average comprises 13 short-term price targets ranging from a low of $75 to a high of $101, with a standard deviation of $8.15. While the lowest estimate indicates an increase of 8.8% from the current ...

Investors looking for stocks in the Retail - Home Furnishings sector might want to consider either Fortune Brands Innovations (FBIN) or Williams-Sonoma (WSM) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Za ...