Fortune Brands Innovations, Inc.

Fortune Brands Innovations, Inc. (NYSE: FBIN) makes home, water and security products. Brands include Moen, House of Rohl, Master Lock, Sentry Safe and residential Yale products. Its reporting segments are Water Innovations, Outdoors and Security.

Fiscal third-quarter results

The comparison covers the 13 weeks ended September 26, 2026 and September 27, 2025. USD millions, except diluted earnings per share.

Adjusted earnings remove selected restructuring, impairment, other charges and gains. Adjusted EBITDA also removes interest, taxes, depreciation and amortization. The quarterly EPS measure retains a 28-cent net tax benefit and 14 cents of net tariff refunds. GAAP EPS includes a 47-cent asset impairment charge.

Water sales fell 5.5% to $584.5 million, with adjusted operating profit of $103.1 million versus $151.1 million. Outdoors sales rose slightly to $347.4 million and adjusted operating profit was nearly flat. Security sales fell 2.4%, while adjusted operating profit rose to $38.8 million from $33.2 million.

Annual outlook and the earlier forecast

Adjusted EPS guidance is $3.20 to $3.30, versus August's $3.22 to $3.52. The midpoint falls from $3.37 to $3.25.

The company's bridge includes two cents of weaker results from businesses under portfolio actions, 23 cents from the core business and end markets, and 22 cents from portfolio and alignment actions. These are partly offset by seven cents of additional net tariff refunds and a 28-cent net tax benefit.

Full-year sales are expected at $4.205 billion to $4.275 billion. Fourth-quarter sales guidance is $925 million to $995 million, with adjusted EPS of $0.19 to $0.29. Management expects softer single-family construction, lower channel inventory and sales pressure from the affected businesses.

Cash generation and investment

For the 39 weeks ended September 26, operating cash flow was $430.6 million versus $270.4 million in the comparable prior period. Capital spending of $59.7 million left $370.9 million of free cash flow, versus $183.1 million.

The November annual operating cash-flow forecast is $480 million to $500 million, down from August's $495 million to $530 million. Planned capital spending is now $90 million to $100 million, versus $110 million to $125 million. Free cash flow is now expected at $380 million to $410 million, compared with $370 million to $420 million. Both free-cash-flow midpoints are $395 million.

At September 26, cash was $230.9 million and debt carrying value was $2.297 billion, compared with $209.7 million and $2.552 billion in June. Net debt was $2.066 billion. The company reported net debt to adjusted EBITDA of 2.5 times and about $1.1 billion available under its revolving facility.

Pending Fiberon sale and operating exits

Fortune Brands agreed in October to sell Fiberon to an Inteplast subsidiary for $160 million in cash. The deal remained subject to regulatory approval, with completion expected within 60 days of the October 15 announcement.

The related additional noncash impairment was estimated at $175 million to $205 million. That estimate concerns the planned disposal and is separate from the impairment already recorded in Q3.

The planned China exit concerns Moen commercial operations serving domestic Asian markets, with completion expected in Q3 2027. China supply-chain operations continue. Rationalization of a Water business's European, Middle Eastern and African footprint is expected by Q4 2027.

The affected businesses together have approximately $320 million to $330 million of annualized sales and $50 million to $55 million of annualized operating losses. These are the company's run-rate estimates.

Execution milestones

Management targets $70 million of annualized administrative savings by Q1 2027. It says service levels improved by ten percentage points in Q3, with order fill rates in the high 90s entering Q4.

The next results can test service improvements, operating margins, delivery of the cash plan and progress toward the Fiberon closing and later business exits.