Home and security products company Fortune Brands (NYSE: FBIN) fell short of the markets revenue expectations in Q3 CY2025, with sales flat year on year at $1.15 billion. Its GAAP profit of $0.59 per share was 46.6% below analysts’ consensus estimates.
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Fortune Brands (FBIN) Q3 CY2025 Highlights:
- Revenue: $1.15 billion vs analyst estimates of $1.18 billion (flat year on year, 2.7% miss)
- EPS (GAAP): $0.59 vs analyst expectations of $1.10 (46.6% miss)
- Adjusted EBITDA: $247.4 million vs analyst estimates of $254.8 million (21.5% margin, 2.9% miss)
- EPS (GAAP) guidance for the full year is $3.75 at the midpoint, beating analyst estimates by 8.3%
- Operating Margin: 11%, down from 17.8% in the same quarter last year
- Free Cash Flow Margin: 20.2%, up from 15.2% in the same quarter last year
- Organic Revenue rose 1.1% year on year vs analyst estimates of 1.6% growth (51.2 basis point miss)
- Market Capitalization: $5.97 billion
Company Overview
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE: FBIN) makes plumbing, security, and outdoor living products.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Fortune Brands’s sales grew at a tepid 5.1% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Fortune Brands’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.2% annually. 
Fortune Brands also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Fortune Brands’s organic revenue averaged 3.1% year-on-year declines. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results. 
This quarter, Fortune Brands missed Wall Street’s estimates and reported a rather uninspiring 0.5% year-on-year revenue decline, generating $1.15 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 3.6% over the next 12 months. Although this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.
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Operating Margin
Fortune Brands has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 16.3%. This result isn’t too surprising as its gross margin gives it a favorable starting point.
Looking at the trend in its profitability, Fortune Brands’s operating margin decreased by 10.4 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q3, Fortune Brands generated an operating margin profit margin of 11%, down 6.8 percentage points year on year. Since Fortune Brands’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for Fortune Brands, its EPS declined by 5.3% annually over the last five years while its revenue grew by 5.1%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.
Diving into the nuances of Fortune Brands’s earnings can give us a better understanding of its performance. As we mentioned earlier, Fortune Brands’s operating margin declined by 10.4 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Fortune Brands, its two-year annual EPS declines of 11% show it’s continued to underperform. These results were bad no matter how you slice the data.
In Q3, Fortune Brands reported EPS of $0.59, down from $1.09 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Fortune Brands’s full-year EPS of $2.68 to grow 55%.
Key Takeaways from Fortune Brands’s Q3 Results
We were impressed by Fortune Brands’s optimistic full-year EPS guidance, which blew past analysts’ expectations. On the other hand, its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $48.79 immediately following the results.
Big picture, is Fortune Brands a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
