Fortune Brands(US:FBIN)2025-10-30 20:12Financial Performance - Q3 2025 reported net sales were $1,149.2 million, a decrease of 0.5% compared to Q3 2024[3] - Q3 2025 earnings per share (EPS) were $0.59, down 46% year-over-year; EPS before charges/gains was $1.09, a decrease of 6%[4] - Operating income (GAAP) for the thirteen weeks ended September 27, 2025, was $125.9 million, a decrease of 38.6% compared to $205.1 million for the same period in 2024[16] - Net income for the thirteen weeks ended September 27, 2025, was $70.8 million, a decline of 48.2% from $136.6 million in the same period last year[24] - Total operating income for the thirteen weeks ended September 27, 2025, was $125.9 million, down 38.6% from $205.1 million in the prior year[38] - Operating income before charges/gains for the thirteen weeks was $206.2 million, a decrease of 4.5% compared to $215.9 million in the same period last year[40] Segment Performance - Water Innovations segment reported net sales of $618.5 million, a decline of 2.6% from the previous year[5] - Security segment achieved net sales of $186.2 million, an increase of 4.9% year-over-year[5] - Water segment net sales decreased by 2.6% to $618.5 million, while Outdoors segment sales increased slightly by 0.5% to $344.5 million[38] - The Outdoors segment reported an operating margin of (1.5%) for the thirteen weeks ended September 27, 2025, a decline of 1840 basis points from 16.9% in the prior year[40] Cash Flow and Debt - The company generated $204.4 million in operating cash flow and $177.0 million in free cash flow during the quarter[6] - Net debt stood at $2.4 billion, with a net debt to EBITDA ratio of 2.7x[6] - Free cash flow for the thirty-nine weeks ended September 27, 2025, was $183.1 million, compared to $262.4 million for the same period in 2024[20] - Long-term debt increased to $2,654.5 million as of September 27, 2025, from $2,173.7 million as of December 28, 2024[18] Guidance and Projections - Full-year 2025 guidance for EPS before charges/gains has been narrowed to $3.70 to $3.80[7] - The company anticipates finishing the year near the low end of its prior net sales guidance of -2% to flat[7] - The U.S. market is expected to remain stable with a forecast of -4% to -2% for 2025[8] - Capital expenditures (Capex) are projected to be between $120 million and $130 million for 2025[9] Restructuring and Charges - The company incurred restructuring charges of $10.8 million for the thirteen weeks ended September 27, 2025, compared to $7.4 million in the same period of 2024, representing a 45.9% increase[16] - Restructuring charges increased by 45.9% to $10.8 million for the thirteen weeks ended September 27, 2025, compared to $7.4 million in the same period last year[25] - Other charges for the thirteen weeks ended September 27, 2025, were $19.4 million, significantly higher than $3.4 million in the same period of 2024[39] - Asset impairment charges of $50.1 million were recorded for the thirteen weeks ended September 27, 2025, with no comparable charges in the prior year[25] Asset and Liability Overview - Total current assets increased slightly to $2,010.2 million as of September 27, 2025, compared to $2,007.4 million as of December 28, 2024[18] - Total liabilities remained stable at $4,139.7 million as of September 27, 2025, compared to $4,139.8 million as of December 28, 2024[18] - Cash and cash equivalents decreased to $223.9 million as of September 27, 2025, from $381.1 million as of December 28, 2024[18] Miscellaneous - High variability and low visibility regarding gains and losses associated with defined benefit plans affect net debt to EBITDA and diluted EPS calculations[52] - Restructuring and other charges are excluded from operating margin and diluted EPS calculations, impacting cash conversion metrics[52] - Net sales excluding the impact of China sales increased by 1.1% for the thirteen weeks ended September 27, 2025[41] - The Company is unable to provide a reconciliation for certain forward-looking non-GAAP measures due to the inherent difficulty of forecasting various items[52]