US: Acquisitions affect Fortune Brands Q3
Strong demand for brands such as Jim Beam helped Fortune Brands deliver an 8% rise in sales in its third quarter. This was not enough, however, to stop a fall in net income to US$92.2m.
Fortune said that its recently acquired spirits and wine brands, including Sauza, Courvoisier, Canadian Club and Clos du Bois, added to sales. However, the expensing of US$83m of the purchase price of the spirits and wine acquisition was one of the reasons for a fall in net incomes to US$92.2m (US$0.61 per diluted share), compared to US$226.8m (US$1.52 per diluted share) in the year-ago quarter.
"The third quarter was a period of tremendous progress for Fortune Brands: our consumer brands drove strong top-line growth, we delivered on our earnings growth goals, and we completed the two most significant value-creating strategic moves in our eight-year history as Fortune Brands," said Fortune Brands chairman & CEO Norm Wesley. "Sales grew in each of our three consumer businesses, our largest brands continued to gain market share, and we grew sales double-digits in cabinets, faucets and entry doors. Our broad-based success was once again driven by successful new products, effective marketing, and customers who increasingly look to us as a partner of choice."
On a continuing operations basis for the third quarter, diluted EPS before charges/gains was US$1.12, up 12% from US$1.00 in the third quarter of 2004. These results were in line with the mean estimate of Wall Street securities analysts.
Net sales were US$1.8bn, up 19% and operating income increased 18% to US$294.5m.
"It's notable that we achieved our double-digit EPS growth goal even with the headwinds of higher costs for energy and raw materials and even before the slight benefit from our new spirits and wine brands," Wesley added. "Results were also impacted by costs for initiatives that will benefit us in the long run, including plant start-up expenses and one-time expenses for a lower cost sourcing initiative in Home & Hardware, and integration-related costs in Spirits & Wine.
"Our new spirits and wine brands added slightly to earnings in the quarter and are on track to contribute modestly to EPS over the balance of 2005, as we've previously projected. We're pleased with the pace and progress of the integration, and we now believe that the benefit to 2006 earnings from this acquisition will be at or above the high end of the 25-35 cents-per-share range we've previously communicated. We believe Fortune Brands is well positioned to deliver significant value in the years ahead as a more sharply focused, high-performance consumer brands company."
The company reaffirmed its full year outlook for double-digit growth in EPS before charges and gains.
"As we look to the fourth quarter, we expect to continue delivering solid performance and we believe our breadth across attractive consumer categories will continue to serve us well," Wesley continued. "We'll face challenging comparisons to last year's fourth quarter when underlying sales increased double-digits and diluted EPS before charges/gains was up more than 20%. Even with these tough comparisons and our continued expectations for more normalized growth in the housing and home-improvement market, we're targeting fourth quarter EPS before charges/gains to grow at a mid-single to low-double-digit rate above the very strong results of the year-ago quarter. For the full year, we're reaffirming our expectation that we'll deliver double-digit growth in EPS before charges/gains, achieving our long-term goal."
As Pernod Ricard, Allied Domecq and Fortune Brands close in on the biggest drinks industry deal since the sale of Seagram, opinion about how the deal will be structured and who stands to win and lose ...
Beam Global Spirits & Wine, the beverage arm of Fortune Brands, has extended its DeKuyper cordials and liqueurs portfolio in the US....
Fortune Brands saw its recently-acquired stable of wine and spirits brands help drive rising sales and earnings during 2005....
Fortune Brands has unveiled a fresh corporate identity for its drinks business, six months after snapping up a raft of premium wine and spirits brands from Allied Domecq....
Fortune Brands, Inc. has declared a regular dividend of US$0.36 per share on its common stock....
US consumer goods group Fortune Brands has declared a regular dividend of 33 cents per share on the Common Stock, payable in cash on June 1, 2005, to stockholders of record at the close of business Ma...
Pernod Ricard is to acquire Allied Domecq....
Constellation Brands is interested in some of Allied Domecq's spirits brands, according to reports today (15 April)....
- Five ways small brands can beat big players
- Pernod Ricard Q1 2017 results by region, brand
- Interview, Bulldog Gin CEO Anshuman Vohra, Pt II
- Interview, Bulldog Gin founder Anshuman Vohra
- The end is nigh for Global Travel Retail - Comment
- Stumbling UK Pound prompts Conviviality price hike
- Edrington’s The Macallan 40 Year Old - NPD
- Bacardi rolls out new Oakheart rum packs to US
- AB InBev fund ZX Ventures buys homebrew co
- Diageo most at risk to Thai alcohol ban - analyst
- Global gin insights - market forecasts, product innovation and consumer trends
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global rum insights - market forecasts, product innovation and consumer trends
- Global Wine Market 2016-2020
- Global RTD insights - market forecasts, product innovation and consumer trends