Why Fortune Brands Stock Crashed After Earnings

Fortune Brands had nothing but bad luck last quarter.Fortune Brands (FBIN 16.48%) stock imploded on Friday, falling 18% through noon ET after missing on both top and bottom lines in its Q4 report last night. Heading into the report, analysts forecast Fortune Brands would earn $1 a share on sales above $1.1 billion. Fortune actually earned $0.86 per share on sales just under $1.1 billion. Image source: Getty Images. Fortune Brands Q4 earnings Fortune Brands' sales slipped 2% in Q4, and that's not the worst part -- earnings plummeted 25% year over year. (Non-GAAP earnings fell only 12% to $0.86 per share, but earnings as calculated according to generally accepted accounting principles (GAAP) were only $0.66.) For the full year, Fortune's sales declined 3% to $4.5 billion, and GAAP profits crashed 34% to $2.47 per share. Why such ill-fortune at Fortune? The company, which manufactures kitchen and bath fixtures under brands such as Moen, Larson screen doors, and Yale door locks, wasn't exactly clear on that point, instead complaining about a "challenging external environment" and promising to "refine" its costs and "optimize" its operations to improve profitability. ExpandNYSE: FBINFortune Brands InnovationsToday's Change(-16.48%) $-10.27Current Price$52.03Key Data PointsMarket Cap$7.5BDay's Range$50.09 - $54.1252wk Range$44.04 - $70.05Volume641KAvg Vol1.8MGross Margin44.40%Dividend Yield1.61% Fortune Brands stock may be a sell Fulfilling this mission will fall to new CEO Amit Banati, who will replace current Fortune Brands CEO Nicholas Fink effective May 13, 2026. Fortune Brands says Fink is leaving in April "to pursue a professional opportunity outside the Company." Still, one can't help but wonder if Fortune Brands' weak profit performance has something to do with his decision to leave (or the board's desire for him to leave). At least Banati is being given reasonable targets to hit. Fortune Brands is guiding investors to expect only flat to 2% sales growth this year, and non-GAAP earnings of about $3.50 -- 3% lower than last year.Read NextJul 3, 2019 •By John BallardWhy Fortune Brands Stock Is Up 50% So Far in 2019About the AuthorRich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”TMFDittyX@RichSmithFoolStocks MentionedFortune Brands InnovationsNYSE: FBIN$52.03 (16.48%) $10.27*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.