Fortune Brands--the conglomerate whose units include such home product lines as Moen faucets, Aristokraft and Kitchen Craft cabinets, Therma-Tru doors, Simonton windows, and Master Lock secuity products--reported today that its Home & Security unit's operating income plummeted 74.6% in the first quarter from the year-earlier period to $5.7 million even though the unit's net sales grew 2.3% to $714.2 million. It also lowered its future growth forecast.
The home and security market "was softer than anticipated," Bruce Carbonari, chairman and CEO of Fortune Brands, said in the company's earnings announcement. "Results included strong gains from new cabinetry business we've earned and growth for Master Lock security products. These gains more than offset modest decreases for faucets and advanced materials windows and doors, categories that faced particularly challenging comparisons to strong growth in the year-ago quarter. Operating income in Home & Security reflected higher costs for commodities and our planned strategic investments to support new business and brand-building programs."
Sales for each brand within the unit weren't disclosed.
Carbonari also changed the company's forecast for all 2011 in the Home & Security unit. Previously, the Deefield, Ill.-based conglomerate had said percentage growth in operating income would be in the high-single-digit to high-teens range. Now it's looking for growth in the mid-single-digit to low-double-digit range. Still, the unit "will continue to outperform (the market) on the success of its new business programs, innovative new products, strong customer service, and lean and flexible supply chains," Carbonari said.
Late last year, Fortune Brands announced it would spin off its Home & Security unit into an independent, publicly traded company. That separation business units should take place early in the fourth quarter, the company said today.