Chief Executive Officer at Fortune Brands Home & Security
Thank you, Dave, and thank you to everyone for joining us on the call today. We are excited to update you on what we expect to be the next phase of value creation for our great company and its stakeholders. As mentioned in today's press release, our Board of Directors has authorized that we pursue a separation into two companies via a tax-free spin of our Cabinets business into a standalone publicly traded company.
The result will produce two world class companies, which for the purposes of this discussion we will refer to as new Fortune Brands and Cabinets. We believe this decision is in the best interests of our investors, associates and customers. By separating these businesses, we can better maximize long-term value and unlock exciting opportunities for both companies.
This move will enable each company to follow independent pods for value creation with fit-for-purpose strategies supported by thoughtful investments. New Fortune Brands will bring brand and innovation excellence to supercharged home, building products and security categories. Cabinets will continue to be the North American market leader driving operational excellence to deliver industry-leading performance. Both companies will be supported by powerful financial profiles setting each up to drive impressive results for investors.
I will discuss the announcement in more detail later in the call, but for our valued associates, channel partners and customers, this should be exciting news. Additionally, we don't expect any disruption to our operations as a result of the separation. Our same dedication, commitment to excellence and to delivering results will continue in both companies that approach produced our strong results in the first quarter and leads the company well-positioned to deliver an excellent 2022 and beyond.
Turning to our first quarter results. Following 2021 a year in which Fortune Brands delivered exceptional results admits unprecedented challenges. Our teams once again performed well in a dynamic environment in the first quarter of 2022. Net sales of $1.9 billion were up 8% versus prior year. Demand remained strong and our teams worked tirelessly to fulfill that demand, providing excellent service to our channel partners.
Our operating margin of 13% was in line with our expectations and we expect operating margin to expand sequentially across the balance of the year. We remain on track to deliver our 2022 margin expansion goals. Our sales growth and margin performance generated earnings per share of $1.31 in Q1. First quarter results look even stronger in the context of lapping the extremely strong performance from the first quarter of 2021.
Our first quarter performance was the result of continued robust demand across our leading brands and advantage channels and continued excellence in execution by our teams. Strong performance from our trade and builder channel across multiple product categories continued past the start of the spring building season and remains robust today. Point of sale remains strong in line with last year's risk pace and is rising seasonally.
Notwithstanding our sustained demand, we are cognizant of the tightening of affordability and of proactively increased priority on cost controls and cash management within each of our businesses as part of our commitment to outperform for shareholders in all environments. We will remain agile in responding to evolving market conditions consistent with our proven track record of outperformance. That said, all signs point to continued strength for R&R and new construction based on fundamental demand drivers and favorable demographics.
Turning to our segments. I'm excited to announce that in the past quarter, we renamed our Plumbing segment, Fortune Brands Water Innovations to better reflect our commit to innovating, engineering and designing products to help consumers manage and conserve one of earth's most precious resources water.
In the quarter, our Water Innovations business delivered net sales growth in all major markets with significant market outperformance from the House of Rohl. In Outdoors & Security, high-single digit sales growth was driven by double-digit growth doors and security and our doors and decking businesses continue to produce at full capacity.
Finally, Cabinets delivered double-digit sales growth as price began to work its way from the backlog into the P&L and volume growth remained positive. While demand has remained solid across the portfolio, inflation continues across the input spectrum. Importantly, in Q1, we offset an inflation dollar for dollar with price and continuous improvement initiatives driven by our Fortune Brands Advantage capabilities.
We expect margin to expand sequentially beginning in Q2 as price and continuous improvement will cover inflation at accretive margins. Importantly, the price taken to help offset inflation has not negatively impacted demand for our products, highlighting the strong pricing power that our brands carry in the marketplace and with our consumers.
Labor availability and supply chain challenges both significant headwinds in the back half of last year and into the early part of the first quarter moderated as the quarter progressed. In China, our key suppliers remain open and producing goods, and we are working with our teams to ensure that inventory positions on key components and SKUs remain elevated to buffer potential outages.
In the first quarter, we continue to invest in our core Fortune Brands Advantage capabilities, which are driving margin resilience and creating future fuel for growth. Our digital transformation efforts are proceeding as expected with particular focus on e-commerce, connected products, data insights, and indirect sourcing. We continue to make further investments in our key strategic priorities.
We're taking action to position ourselves for the future. And that includes making progress on key ESG focus areas. I recently released 2021 ESG report highlights initiatives and programs related to safety, diversity, equity and inclusion, community, sustainability and climate. Additionally, we've set carbon emissions and renewable energy targets to pursue in the years ahead.
Those climate goals and expanded environmental disclosures are contributing to improved ESG ratings. That said, while we have a lot to be proud of today, I see even opportunity for us to make a larger positive impact for our people, our consumers, our partners, and our communities. To complement our operational results, we opportunistically repurchased $405 million of shares year-to-date and close on our Solar Innovations acquisition.
Our cumulative capital returned to shareholders since the 2011 spin has surpassed $4 billion with another $3 billion deployed by accretive acquisitions. We will continue to deploy capital to drive value creation and are actively looking at further opportunities to bolster the portfolio and drive returns.
Now, I'd like to turn to some thoughts on the current housing market. Demographic and demand drivers remain favorable for long-term housing growth. Our rising interest rates and continued inflation are potential impediments to the pace at which new homes and building products get consumed. There are some stark differences between today's environment and that of 2018 and housing experience a short-term slowdown.
The supply of homes remains near all-time lows. The consumer is in a strong financial position with tremendous home equity and continues to demonstrate sustained interest in investing in and upgrading their home. With so few homes available for sale, many buyers are rethinking their existing space and are undertaking significant R&R projects to turn what they have into what they need. The current age of housing stuck at nearly 40 years old on average is perpetuating the need for this action.
As we are experiencing, big ticket items in priority rooms such as the kitchen, bath and outdoors remain strong from a POS and order perspective. The builder community being governed by the same labor and supply chain issues impacting the broader economy is working through a backlog of unfinished starts while experiencing continued high demand in many markets. This dynamic extends the fundamental need for supply to multi-year opportunity as we remain millions of homes under built.
Short-term affordability and supply chain pressures will eventually abate and long-term fundamentals in favorable demographics will spur growth. Ultimately, the only further soul for the supply and demand and balance in housing is to build more homes. While rising interest rates and increasing home prices have tightened affordability for consumers. Home price appreciation has driven home equity values to nearly $10 trillion as of the end of 2021.
Consumers continued to demonstrate an elevated interest in spending on the home. Recent Google Search trend data over the past two months shows that queries on home renovation, bathroom remodel, and kitchen remodel remain 20% to 50% above pre-COVID search trends. Additionally, when queried 65% of the respondents from a recent consumer survey indicated that they would continue their higher spending levels on the home. As evidenced, the consumer remains healthy and housing remains an in focus category for investment.
We continue to believe in a sustained runway for housing expansion driven by demographics and fundamentals and underpinned by low supply and aged homes. This multi-year runway for growth provides a significant long-term opportunity for new construction and R&R. We intend to outperform the strong market and will stay agile to capture opportunities and quickly respond if short-term headwinds materialize. We have the experience and the team to create value and outperform in any market environment.
In summary, in 2022, we put a plan together to continue to grow above market, offset all inflation and in the face of expected continued headwinds, achieve margin progression for the full year while still investing for the long-term. After the first quarter, we remain on target to achieve these goals.
Our 2022 outlook, which Pat will address later in the call included a prudent and conservative set of volume assumptions and a clear line of sight to backlogs and embedded price. The first quarter, which included war in Ukraine and a COVID outbreak in China has not altered our expectations for the year. We are a 100% focused on value creation through any cycle and we will say agile and flexible to meet any opportunities and challenges that may arise. We're accelerating that pursuit of value creation with today's separation announcement. It could not be more excited for the future of these two great companies.
Before I address that further, I would like to turn it over to Pat to go through our quarterly financial performance in greater detail. Pat?