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- **Revenue Resilience**: Flat Q3 revenue ($1.1B) with 1% growth excluding China, outperforming market by 200 basis points.
- **Digital Breakthrough**: Digital portfolio nearing $300M annualized, Flow's leak protection service driving subscription growth.
- **Tariff Mitigation Success**: Fully offset 2025 tariffs, 2026 impact reduced to $200M via supply chain and pricing.
- **Segment Strength**: Water (+1% e-commerce), Outdoors (House of Rohl up low double digits), Security (Master Lock engagement +10%).
- **2026 Outlook**: Flat market expected, with outperformance driven by R&amp;R recovery and digital innovation.

**【CEO Summary Section】**
- **Sales Performance**: Q3 revenue was $1.1 billion, flat year-over-year, with 1% growth excluding China. Point-of-sale (POS) outperformed the market by 200 basis points, driven by strategic initiatives and brand strength.
- **Strategic Initiatives**: Completed headquarters consolidation 2 years ahead of schedule, hiring 500 associates, enhancing collaboration and execution. Digital transformation and advanced analytics enabled precise pricing and promotion strategies.
- **Market Outlook**: Despite cautious consumer sentiment, the company expects to outperform the market in 2025 and 2026, driven by housing recovery, luxury brand growth, and digital innovations like Flow's leak protection service.
- **Segment Highlights**: 
  - **Water**: Sales $619M (-3% YoY), outperforming market with strong e-commerce rebound and Flow's Connected Water growth.
  - **Outdoors**: Sales $345M (flat YoY), House of Rohl delivered low double-digit POS growth, while Fiberon saw sequential sales improvement.
  - **Security**: Sales $186M (+5% YoY), Master Lock brand engagement up double digits, Yale Smart Locks gaining traction.

**【CFO Financial Commentary】**
- **Financial Results**: Operating income $206M (-5% YoY), EPS $1.09. Free cash flow $177M, guiding to $400-420M for the year.
- **Segment Margins**: 
  - **Water**: 24.4% margin, disciplined pricing offsetting volume declines.
  - **Outdoors**: 15.5% margin, impacted by lower seasonal inventory builds.
  - **Security**: 17.8% margin, investments in R&D and marketing driving long-term growth.
- **Tariff Mitigation**: On track to fully offset 2025 and 2026 tariff impacts through supply chain optimization and pricing. China exposure reduced to ~10% of COGS.
- **Balance Sheet**: Net debt $2.4B, deleveraging to 2.7x net debt/EBITDA. Restructuring costs updated to $100-120M.

**【Q&A Highlights】**
- **Pricing Strategy**: Maintained disciplined, incremental pricing to offset tariffs, with no second-round increases planned. Focus on promotions and volume growth in 2026.
- **Digital Growth**: Digital portfolio nearing $300M annualized run rate, Flow subscription service launch poised for long-term revenue streams.
- **Margin Outlook**: 2026 guidance for flat market, with outperformance driven by R&amp;R recovery and digital initiatives. Margins expected to stabilize as volume growth resumes.
- **Tariff Impact**: 2026 annualized tariff impact reduced to ~$200M, with copper tariffs de minimis. Supply chain diversification and cost-out initiatives mitigating risks.

Fortune Brands Innovations, Inc. (FBIN) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

FBIN

FBIN fundamentals

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