DEERFIELD, IL-- MasterBrand Cabinets parent Fortune Brands Q1 2015 sales increased 7 percent to $951 million over the prior-year quarter. Sales growth of 9 - 10.5 percent is predicted, excluding the potential impact of the Norcraft Cabinetry acquisition.
"The 2015 home products market growth was moderate in the first quarter as we expected. Regardless, our teams delivered profit growth right on plan," said Chris Klein, CEO, Fortune Brands. Klein anticipates accelerating new construction activity in the second half of the year, saying the company looks to maintain its full year profit outlook, while reducing the high end of their sales outlook due to the impact of currency."
While sales grew 7%, operating income was $67.3 million, compared to $69.3 million in the prior-year quarter.
Cabinet sales were even with the prior year, with the key dealer channel growing 8% offset by the timing of in-stock cabinet and vanities shipments and the impact of currency.
Door sales were up 5 percent with growth in both the wholesale and retail channels.
"The completion of capacity investments and the pending Norcraft acquisition position our cabinets segment well to leverage the improving housing market," said Lee Wyatt, CFO.
Agreement to Acquire Norcraft
As previously announced, the Company has signed an agreement to acquire Norcraft, publicly-owned manufacturer of kitchen and bathroom cabinetry.
"Norcraft has proven capabilities and great relationships in the dealer channel with strong operating management throughout their business," said Klein. We intend to replicate the success we have had selling multiple product lines to dealers into the Norcraft relationships, as well as leverage Norcraft products into our existing relationships. In a few years this business could add more than $450 million in revenue."
Upon completion of the aquisition, Norcraft will be merged into Fortune Brands' cabinets business.
Annual Outlook for 2015
The Company's 2015 annual outlook is based on a U.S. home products market growth assumption of 6 to 8 percent. Based on the Company's expectation to continue outperforming the market, the Company reduced full-year 2015 net sales growth from a range of 9 to 11 percent to a range of 9 to 10.5 percent to reflect the impact of currency.
The Company reaffirmed its expectations for EPS before charges/gains to be in the range of $2.00 to $2.10, which compares to 2014 EPS before charges/gains of $1.74.
"The first quarter home products market performed as we expected. We plan for some improvement in the second quarter," said Klein. "Due to the positive signs we are seeing in April and the natural lag for our businesses, we continue to look for the strongest market growth in the second half of the year."
The outlook does not include any potential impact from the pending Norcraft acquisition.
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