- Company name
- Fortune Brands Innovations
- Sector
- Building products
- About
- Fortune Brands Innovations makes home, security and digital products for houses and commercial buildings. It reports three segments. Water Innovations sells faucets, showers and water products under brands such as Moen, House of Rohl, Aqualisa and SpringWell, and it is the largest segment. Outdoors sells entry doors and storm doors under the Therma-Tru and Larson brands, and composite decking under Fiberon, which it agreed to sell in October 2026. Security sells locks and safes under Master Lock, SentrySafe and Yale residential. Demand comes mainly from repair and remodel work on homes and from new home construction, and the company also sells outside the US. In November 2026, it said that it will exit its commercial business in China by Q3 2027.
- Thesis
- Fortune Brands trades at a discount because its sales fall with a weak US housing market and because the market doubts that the new management can fix execution. In Q3 2026, sales fell 3.1%, Water Innovations sales fell 5.5%, and the operating margin before charges fell to 14.0% from 17.9%. The company now expects 2026 EPS before charges of $3.20 to $3.30, down from $3.22 to $3.52, and this includes one-time tariff refunds and a $0.28 net tax benefit. It expects new single-family construction to fall by a mid to high single-digit percentage in 2026 and repair and remodel spending to fall by a low single-digit percentage. In March 2026, after talks with shareholders, Amit Banati gave up his planned move to CEO, an interim CEO took over, and Ed Garden of Garden Investments joined the Board under a cooperation agreement. Jesse Singh, the former CEO of AZEK, became CEO on June 29, 2026, and calls his plan a multi-year turnaround. The company agreed to sell Fiberon for $160 million, will exit its commercial business in China and will reduce the EMEA operations of a Water business. Together these units lose about $50 million to $55 million a year on revenue of $320 million to $330 million. It also expects $70 million of annual SG&A savings by Q1 2027. For the gap to close, sales in Water Innovations must return to growth, the operating margin before charges must rise without one-time items, the exits and savings must arrive on time, and lower mortgage rates must help the housing market. The full-year report and the 2027 outlook, expected in early February 2027, will give the new team's first full plan. If execution improves, the gap can close over the next four to eight quarters. The main risk is a housing market that stays weak for longer.
- Risks
- Demand depends on US home repair and remodel spending and on new home construction. The company expects new single-family construction to fall by a mid to high single-digit percentage in 2026 and repair and remodel spending to fall by a low single-digit percentage. High mortgage rates keep home sales low, and fewer home sales lead to fewer remodels.
The leadership team is new. The company had an interim CEO from March 16 to June 29, 2026, a new CFO from September 21, 2026, and a new Chief Information Officer from November 2, 2026. In October 2026, it also changed the leaders of Moen and House of Rohl. The new team must improve execution while it exits weak businesses and cuts costs.
The company imports many products and parts, and tariffs raise its landed product cost. Tariff refunds add to 2026 earnings, but these refunds are one-time income. New tariffs can raise costs again.
Commodity costs rose in 2026. If the company cannot raise prices enough, its margins fall. Large retail customers also have strong buying power.
The Fiberon sale needs regulatory approval and can fail. If it closes, the company receives only $160 million after impairments of about $400 million or more on the business. The exits from China and from part of EMEA bring more charges until late 2027.
- Balance sheet
- Cash: $231M
Debt: $2.3B
Net debt: $2.1B
EBITDA, last 12 months: $830M
Net debt / EBITDA: 2.5× (medium)
Undrawn credit line: $1.1B, to January 2031
Last debt due: 2052
At September 26, 2026, Fortune Brands had $231 million of cash and $2,297 million of long-term debt, down from $2,545 million at December 27, 2025. Most of the debt is senior notes. At June 27, 2026, the notes were $700 million at 3.250% due September 2029, $450 million at 4.000% due March 2032, $600 million at 5.875% due June 2033 and $450 million at 4.500% due March 2052, and the company showed its commercial paper as long-term debt because its revolving credit facility backs it. The company reports net debt of $2.07 billion and net debt of 2.5 times EBITDA before charges for the 52 weeks to September 26, 2026. EBITDA here is that figure, $829.6 million. Its $1.25 billion revolving credit facility runs to January 2031 and requires net debt below 3.5 times EBITDA and EBITDA above 3.0 times interest. About $1.1 billion was available on the facility at September 26, 2026. In Q3 2026, the company made $331 million of free cash flow and bought back $40 million of shares. It expects $380 million to $410 million of free cash flow in 2026. The sale of Fiberon for $160 million in cash, if it closes, adds to cash.
As of Sep 26, 2026.
- Checkpoints
- Nov 3, 2026: Q3 2026 results: sales trend and margins. Failed. Watch: Water Innovations sales that fall less than in Q2, a higher margin before charges without tariff refunds and the 2026 outlook kept pass; another sales decline of more than 4% or an outlook cut fails. Outcome: Water Innovations sales fell 5.5%, less than the 6.5% of Q2, but the operating margin before charges fell to 14.0% from 17.9% and the company cut its 2026 EPS outlook to $3.20 to $3.30.
Dec 2026 (estimate): Fiberon sale closes. Pending. Watch: The sale closes within the expected 60 days for $160 million in cash passes; a failed approval or a lower price fails.
Feb 3, 2027 (estimate): Full-year 2026 results and the new team's 2027 outlook. Pending. Watch: 2026 EPS before charges inside the $3.20 to $3.30 outlook and a 2027 outlook with sales growth, margin expansion and the $70 million of SG&A savings pass; another year of falling sales and margins fails.
- Recent events
- Nov 6, 2026: Fortune Brands elected Victor Grizzle to its board, effective January 1, 2027. David Mackay will retire from the board on December 9, 2026.
Nov 3, 2026: Fortune Brands reported Q3 2026 results. Sales fell 3.1% to $1.11 billion, and Water Innovations sales fell 5.5%. GAAP EPS was $0.42, after a $0.47 asset impairment charge. EPS before charges was $1.14, including a $0.28 net tax benefit and $0.14 of net tariff refunds. The operating margin before charges fell to 14.0% from 17.9%. Free cash flow was $331 million, and the company bought back $40 million of shares. It cut its 2026 outlook to sales of $4,205 million to $4,275 million and EPS before charges of $3.20 to $3.30. It will exit its commercial business in China by Q3 2027 and reduce the EMEA operations of a Water business by Q4 2027.
Oct 27, 2026: Fortune Brands named David Barry, its Chief Operating Officer, President of Moen. House of Rohl now reports directly to the CEO. Peter DuBois joined as Chief Information Officer on November 2, 2026.
Oct 15, 2026: Fortune Brands agreed to sell its Fiberon composite decking business to a subsidiary of Inteplast Group for $160 million in cash. It expects to close within 60 days, subject to regulatory approval. It expects an additional non-cash impairment of about $175 million to $205 million, after a $221 million impairment of Fiberon at June 27, 2026.
Sep 29, 2026: Fortune Brands declared a cash dividend of $0.26 per share. It is payable on December 9, 2026, to shareholders of record on November 20, 2026.
Sep 9, 2026: Fortune Brands named Peter Clifford CFO, effective September 21, 2026. He was CFO and Chief Operations Officer of AZEK and CFO of Filtration Group.
Aug 4, 2026: Fortune Brands reported Q2 2026 results. Sales fell 4.1% to $1.15 billion. GAAP EPS was a loss of $0.19, with a $1.44 impairment charge and a $0.52 benefit from tariff refunds. EPS before charges was $1.35. Water Innovations sales fell 6.5%. It raised its 2026 EPS outlook before charges to $3.22 to $3.52 from $3.00 to $3.30, which includes $0.52 of tariff refunds and new spending to improve execution.
Jul 24, 2026: The Chief Legal Officer, Hiranda Donoghue, agreed to leave the company on July 31, 2026.
Jun 29, 2026: Fortune Brands appointed Jesse Singh as CEO. He led AZEK from 2016 to 2025. The interim CEO, David Barry, became Chief Operating Officer. The Board Chair took direct oversight of the Fiberon business during its strategic review.
May 7, 2026: Fortune Brands reported Q1 2026 results. Sales fell 2% to $1.0 billion. EPS before charges fell 20% to $0.53. It cut its 2026 EPS outlook before charges to $3.00 to $3.30 from $3.35 to $3.65, because of higher commodity costs and more cautious consumers.