No inflation here either - move along folks:
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Reuters
Reuters Summit-Fortune Brands cites rising raw material costs
Thursday March 18, 7:36 pm ET
NEW YORK, March 18 (Reuters) - Fortune Brands Inc. (NYSE:FO - News) expects to meet long-term growth goals despite rising costs of raw materials such as steel and wood, its CEO said on Thursday.
"There are some fairly significant increases in raw material costs," Chief Executive Norm Wesley told the Reuters Consumer Products and Retail Summit. "The two big ones for us would be steel and particle board."
Wesley said Fortune Brands, whose products include golf balls, cabinets and spirits, has a history of being able to pass along raw material cost increases and was "in the process of trying to do that" now.
Steel prices have surged more than 30 percent so far this year on strong global demand. Lumber prices are also up significantly from a year earlier.
"No one likes to take a price increase, but the reality is if steel goes up dramatically, which is what is happening, it's going to get reflected in price," Wesley said.
Despite higher raw material costs, Wesley said Fortune Brands was being helped by the weak dollar and would "comfortably" achieve its 2004 growth goals. The company said on Thursday it expects first-quarter profit to top analysts' forecasts, citing strength in its golf and home hardware businesses.
Fortune Brands shares rose $3.73, or 5 percent, to $75.56 in New York Stock Exchange (News - Websites) trading on Thursday.
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