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Sales Growth Wasn't Enough for Fortune Brands Investors

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" A Brand like a Friend." Henkel is a leader with brands and technologies that make people's lives easier, better and more beautiful. Henkel, a Fortune Global 500 company, - Home Care, Personal Care, and Adhesives, Sealants and Surface Treatment. In fiscal 2005, Henkel generated sales of 11.974 billion euros. More than 50, 000 employees work for Henkel worldwide. People in approximately 125 countries around the world trust in brands and technologies from Henkel.

Stock Investing Course (AXcess News) Lincolnshire, IL - Fortune Brands, Inc. (NYSE: FO), a consumer brands company, attributed a rise in saless to its Moet, Titleist, Jim Beam whiskey brands. Fortune'ssales rose 8 percent in the third quarter as a result of stong brand purchases, though earnings results disappointed investors as a result of the recent acquisitions.

When Bobby Holt, Lee Falck and a group of investors purchased the company in the year 2000, Brandrud growth had plateaued. In addition, the competition from overseas vendors was increasing in their market. quality furniture. The first task was to streamline the manufacturing process, reduce lead times and introduce more cutting edge design concepts. With leads times reduced by 66% line, sales expansion and growth in their niche market as well as market expansion became the order of the day.

Stock Market Game "The third quarter was a period of tremendous progress for Fortune Brands: our consumer brands drove strong top-line growth, we delivered on our earnings growth goals, and we completed the two most significant value-creating strategic moves in our eight-year history as Fortune Brands," said Fortune Brands chairman & CEO Norm Wesley. "Sales grew in each of our three consumer businesses, our largest brands continued to gain market share, and we grew sales double-digits in cabinets, faucets and entry doors. Our broad-based success was once again driven by successful new products, effective marketing, and customers who increasingly look to us as a partner of choice."

The jump soundly beat Wall Street estimates. Analysts polled by Thomson Financial had expected an increase of 7.9 percent. Total sales for the month ended April 29 totaled $207.8 million, up 30 percent from $159.4 million in April 2005. For the year through the end of April, store sales were up 6 percent from last year, while net sales increased 20 percent to $657.3 million from $546. ago period.

Stock Investing Game Net income was $92.2 million ($0.61 per diluted share), as compared to $226.8 million ($1.52 per diluted share) in the year-ago quarter. EPS comparisons were adversely impacted by three significant items: the expensing of $83 million of the purchase price of the spirits and wine acquisition, as required by mark-to-market accounting standards for transactions based in foreign currencies ($0.55 per diluted share); the absence of a $45 million tax-related credit recorded in the year-ago period ($0.31 per diluted share); and the absence of income due to the ACCO spin-off (net $0.16 per diluted share).

But sales of pet supplies, cosmetics and fragrances will increase faster than other categories at growth rates of over 30 percent, the report found. Last year, online sales rose 25 percent to $176.4 billion, with 28 percent growth in online purchases excluding travel. Total Internet sales in 2004 and 2003 reached $141.4 billion and $114.1 billion, respectively, Silverman said. "I think we're still looking for the next several years (for) growth over 20 percent per year, " he said, adding that growth closer to 30 percent was probably not sustainable.

Journal Prime Rate Street Wall Shares of Fortune Brands were down 37 cents at $77.43 10.24am Friday, reflecting investor disappointment in its results.

Innovate is a magazine that provokes thought on new ideas. These potent ideas can fuel growth in an established organization or lead to formation of new enterprises. Innovate is read by Fortune 1000 CEO's, investors, policymakers, financiers, ... [ more]

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