Yahoo Finance

• Revenue: $1 billion, down 7% year-over-year; down 5% organically excluding China and FX.

• Operating Income: $136 million.

• Operating Margin: 13.1%.

• Earnings Per Share (EPS): $0.66.

• Water Innovations Sales: $565 million, down 10%; down 7% organically excluding China and FX.

• Outdoors Sales: $305 million, down 3%.

• Security Sales: $163 million, down 4%.

• Free Cash Flow: Negative $113 million.

• Cash: $340 million.

• Net Debt: $2.6 billion.

• Net Debt-to-EBITDA Leverage: 2.8x.

• Share Repurchases: $225 million year-to-date; $175 million in Q1.

• Tariff Impact: Expected $200 million impact in 2025; $525 million annualized impact anticipated for 2026.

• Digital Product Activations: Over 200,000 in Q1.

• Flow Sales Growth: Increased by 180% over Q1 2024.

• Warning! GuruFocus has detected 8 Warning Signs with BWIN.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fortune Brands Innovations Inc (NYSE:FBIN) has successfully reduced its reliance on China, with plans to decrease its China cost of goods sold (COGS) to around 10% by the end of the year.

• The company is leveraging its strong North American manufacturing base, with 60% of its COGS from the U.S. and 70% from North America, providing a competitive advantage.

• FBIN's digital business is performing well, with over 200,000 device activations in the first quarter and a strong pipeline of new partnerships, including with Liberty Mutual Insurance.

• The company has a robust balance sheet with strong annual cash flow, allowing flexibility to navigate challenging conditions while continuing to invest for the future.

• FBIN's strategic initiatives, such as the new Master Lock and SentrySafe brand campaigns, have shown immediate positive impacts on sales and website traffic.

Negative Points

• The company is facing significant tariff impacts, with an anticipated $200 million impact in 2025 and $525 million annualized, which requires mitigation through supply chain moves and pricing actions.

• FBIN's first quarter sales were down 7% compared to the previous year, reflecting a softer demand environment and inventory reductions across channels.

• The housing market uncertainty and cautious consumer behavior have led to slower spring selling seasons and hesitancy in major purchases, impacting demand.

• The Water Innovations segment saw a 10% decrease in sales, with inventory destocking in wholesale channels and a transition to enhanced pricing discipline in e-commerce affecting performance.

• The company has suspended its detailed full-year financial guidance due to uncertainty around consumer demand and external market conditions.