### FORTUNE BRANDS INNOVATIONS Q2 2026 Results: Management reported a 4% year-over-year decline in revenue and lowered full-year EPS guidance, primarily due to service challenges and increased investments. New CEO Jesse Singh emphasized a return to basics, focusing on customers, simplifying the organization, and investing in core businesses.

Key Data: Total revenue was $1.2 billion, down 4% year-over-year; adjusted EPS was $1.35, including a net tariff refund benefit of $0.52. Water segment revenue fell 6.5%, impacted by service challenges and market share losses.

Business Developments: After taking office, new CEO Singh plans to reintegrate the marketing team into business units to accelerate decision-making and advance the announced $70 million cost-cutting plan. The Water business experienced service disruptions due to supply chain and system changes; the company is improving the situation by increasing expedited freight costs and restoring the original S&OP process. Security segment grew 3.8%, with sales of the new Master Lock Elite padlock exceeding expectations. In the Outdoors segment, the Larson brand performed well, and a strategic review of Fiberon is ongoing.

Guidance & Outlook: The company maintained its full-year revenue guidance (low single-digit decline) but expects to be at the low end of the range. Full-year EPS guidance was lowered to $3.22-$3.52 (including the $0.52 refund), implying core EPS of $2.70-$3.00, reflecting investments to improve service and accelerate new product development. Q3 revenue is expected to decline 1%-2%, with EPS of $0.72-$0.76.

Risk/Highlight Signals: Management explicitly stated that service challenges in the Water business are a drag on short-term margins but believes Q3 and Q4 may represent the trough for margins, with improvement expected in 2027. Concurrently, the company is actively evaluating its portfolio to concentrate resources on core brands.