It's rarely a good idea to mix hard liquor and home renovation work. For Fortune Brands Inc., however, consumer demand for one helped overcome declining sales for the other.
Fortune Brands makes bathroom fixtures and Jim Beam bourbon, among other spirits. One guess which product continued posting robust sales over the past year.
The company announced that second-quarter profit fell less than analysts estimated after demand for its bourbon offset a slump in home renovation.
Profit fell 6.4 % to $232 million, or $1.48 a share, from $247.8 million, or $1.63, a year earlier. Sales rose 4.3%, more than analysts projected, to $2.35 billion.
CEO Norm Wesley had expanded Fortune's wine and liquor unit to reduce dependence on the U.S. housing market. Revenue at the home and hardware division increased less than 1% during the biggest U.S. housing slump in 16 years, while spirit and wine sales climbed 6.3%, led by Sauza tequila.
The company, based in Deerfield, IL, produces Moen, Aristokraft, Therma-Tru hardware, doors and cabinet brands.
In the past two years it has added such spirits brands as Sauza and Maker's Mark bourbon to take advantage of the growing market of consumers willing to spend higher prices for quality level liquor. The liquor unit accounts for just 29% of sales, but provided 44% of operating income in the quarter.
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