Fortune Brands Home & Security says net sales rose 4 percent to $848 million.
Fortune Brands Home Security - which also includes Masterlock security and Moen faucets - saw a modest sales rise, mostly from the Moen operation, but operating income fell against a 2010 quarter that saw an $8.2 million court ruling in its favor.
"We continued to grow sales, which indicates that we are winning despite ongoing challenges in our industry," said Christopher J. Klein, CEO.
Making its first quarterly report since an Oct. 3 spin-off from conglomerate Fortune Brands, the newly independent maker of cabinetry, windows and doors said operating income fell 24 percent to $49.4 million from the prior-year quarter. Excluding the favorable resolution of an $8.2 million settlement in the third quarter of 2010, the decrease would have been just 6 percent.
"Our investments in innovation and market expansion are paying off in meaningful growth in our plumbing, cabinets, and storage & security segments, " Klein said."Our advanced materials window and door systems segment was impacted by lower window sales and an unfavorable product mix." Klein said despite cabinetry promotional expenses, raw materials, and transportation costs impacting margins, "all of our segments were profitable on an adjusted pro forma basis."
Kitchen and bath cabinetry net sales were up 4 percent, with sucess in in-stock cabinetry and vanity programs at Lowe's and the Martha Stewart Living line of cabinets at The Home Depot.
Advanced Materials Window & Door Systems net sales were down 1 percent, with an increase in door sales offset by a sharp decline in windows. The company believes last year's energy tax credit pulled substantial windows demand forward into 2010.
"The third quarter home products market was weaker than earlier estimates, and that impacted the big-ticket, discretionary products in our cabinetry and window and door segments," Klein said.
"We addressed our manufacturing footprint early in the housing downturn and anticipate that this will allow us to generate new products and programs now to help us remain successful, regardless of the recovery's pace," Klein said. "
For the fourth quarter of 2011, Klein believes the market for its products will be similar to the third quarter, down 2 to 3 percent. In 2010, Fortune Brands Home & Security units had (pro forma) $3.234 billion in sales, an increase of 8 percent over 2009. Operating income was $180 million.
Have something to say? Share your thoughts with us in the comments below.