Earnings call transcript: Fortune Brands beats Q3 2026 EPS, sales miss and outlook weighs

Fortune Brands Innovations reported a third-quarter profit that exceeded Wall Street's expectations, with adjusted earnings per share (EPS) at $1.14, surpassing the $0.74 estimate. However, revenue fell to $1.1 billion, missing forecasts by about $10 million, or 0.89%. Sales declined 3.1% from the previous year, and operating income dropped 24.6%.

The company's weaker results were attributed to softer demand, pricing shortfalls, and lower margins. Management outlined a broad restructuring plan, including the sale of Fiberon, a China exit, and changes to the EMEA footprint. Despite earnings benefiting from tariff refunds and a tax gain, underlying profitability remained weaker than the headline figures suggested.

Sales in the Water segment, the company's largest, fell 5.5% to $584 million, with operating income down 31.8%. The Outdoors segment showed a modest sales increase, but higher material and freight costs pressured margins. The Security segment remained the strongest on profitability, although sales declined. The broader housing and repair-and-remodel markets have softened, pressuring Fortune Brands.

The company expects sales of $925 million to $995 million and EPS of $0.19 to $0.29 for the fourth quarter, with full-year 2026 targets of $4.205 billion to $4.275 billion in sales and $3.20 to $3.30 in EPS.