The company outlines cost actions and cautious 2026 outlook as housing markets remain soft.

February 13, 2026

Results weaken as housing demand stays under pressure

Fortune Brands Innovations closed out 2025 with lower sales and earnings, as soft housing and renovation demand continued to weigh on results. The company said it is responding by tightening its cost structure, optimizing operations, and staying focused on the initiatives it believes will lift margins over time.

Fourth-quarter sales slip, profitability falls more sharply

In the fourth quarter, net sales fell 2.4 percent from a year earlier to $1.08 billion. When the impact of China is removed, sales were essentially flat, pointing to steadier performance in other parts of the business.

Even so, profitability declined. Operating income dropped 31.8 percent to $121.6 million, and diluted earnings per share fell 25 percent to $0.63.

On an adjusted basis, which excludes restructuring and other items, Fortune Brands reported earnings per share of $0.86. That was down 12 percent from the prior-year quarter.

Full-year 2025 shows similar trend

Full-year results followed a similar pattern. Net sales decreased 3.2 percent to $4.46 billion. Diluted earnings per share declined 34 percent to $2.47, while adjusted earnings per share came in at $3.61, down 12.4 percent from 2024.

The company said it outperformed its end markets in 2025, even as demand remained under pressure.

Segment performance was mixed

Results varied across Fortune Brands’ three operating segments. In the fourth quarter:

• Water Innovations sales fell 4.3 percent


• Outdoors sales declined 2.7 percent


• Security grew 5.9 percent

Margins told a more complicated story. Outdoors profitability weakened sharply, reflecting a manufacturing facility fire and other impacts included in reported results. Water and Security also saw margin pressure on a reported basis, though Security showed improvement when adjusting for charges and gains.

For the full year:

• Water Innovations revenue fell 4.6 percent to $2.45 billion


• Outdoors declined 2.0 percent to $1.32 billion


• Security was nearly flat at $692.6 million

Fortune Brands also recorded restructuring and impairment charges tied to actions such as facility closures, product-line rationalization, and consolidating regional offices into a single campus headquarters.

Cash flow remains a stabilizing factor

Even with weaker earnings, cash flow remained a key support. Fortune Brands generated $478.6 million in operating cash flow for the year and $366.8 million in free cash flow. The company said this translated into a cash conversion ratio above 120 percent.

The company ended the year with $1.13 billion in liquidity, including $264 million in cash and $862.6 million available under its revolving credit facility. Fortune Brands also extended its $1.25 billion revolving credit facility for an additional five years.

Net debt stood at $2.28 billion, equal to 2.6 times EBITDA before charges and gains.

Management focuses on structural margin improvement

Management said the company is not satisfied with its current profitability levels and is looking for further opportunities to improve performance structurally.

The company’s focus includes:

• Refining the cost base


• Optimizing the operating footprint


• Improving efficiency across the organization

At the same time, Fortune Brands said it plans to continue investing in areas such as brand building, innovation, and workforce development.

2026 guidance reflects continued uncertainty

Looking ahead, Fortune Brands issued 2026 guidance that reflects what it described as continued uncertainty in its end markets. The company expects net sales to range from flat to up 2 percent. Adjusted earnings per share are forecast between $3.35 and $3.65.

The company expects the global market and U.S. market to decline in the low single digits, with China down in the low double digits.

Key 2026 targets include:

• Operating margin before charges and gains: 14.5 percent to 15.5 percent


• Free cash flow: $400 million to $450 million

Segment outlook for 2026

By segment, Fortune Brands expects:

• Water Innovations sales from flat to up 2 percent


• Outdoors sales from down 0.5 percent to up 1.5 percent


• Security sales from flat to up 3 percent

The company said actions to optimize its footprint and sharpen resource allocation should become more visible as the year progresses, supporting earnings momentum into the future.