What Happened?
Shares of home and security products company Fortune Brands (NYSE: FBIN) fell 16.7% in the afternoon session after the company reported disappointing fourth-quarter 2025 results and issued a weak forecast for the upcoming year.
The home and security products company's revenue fell 2.4% year on year to $1.08 billion, missing Wall Street's expectation of $1.14 billion. Its profit also fell short, with GAAP earnings per share of $0.63 coming in 36.5% below the analyst consensus of $0.99. Looking ahead, the company's guidance for the 2026 financial year was also underwhelming, with an earnings per share forecast of $3.50 at the midpoint, which missed analyst estimates by 14.4%. The combination of missed expectations on both the top and bottom lines, coupled with a disappointing outlook, prompted a negative reaction from investors.
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What Is The Market Telling Us
Fortune Brands’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Fortune Brands and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 3.6% on the news that the Dow Jones Industrial Average fell as much as 0.7%, reflecting lingering uncertainty, and capping off a volatile week which saw stocks enjoy some relief as President Donald Trump reduced tensions with European allies by backing off his threat of imposing new tariffs. Threats of tariffs initially created uncertainty for businesses, as they can lead to higher costs for multinational corporations and disrupt global supply chains. By withdrawing the threat, the administration removed a significant headwind for the market, prompting a relief rally. This development was a key factor in helping major indexes recover from earlier losses, even as some analysts noted that underlying geopolitical risks and market volatility remain concerns for investors.
Fortune Brands is flat since the beginning of the year, and at $51.36 per share, it is trading 25.5% below its 52-week high of $68.95 from February 2025. Investors who bought $1,000 worth of Fortune Brands’s shares 5 years ago would now be looking at an investment worth $597.14.
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