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Fortune Brands Inc (FBI)

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Tuesday 01 July, 2008

Fortune Brands Inc

Fortune Brands Updates Earnings Expectations

Fortune Brands, Inc.
                  

Fortune Brands, Inc. (NYSE: FO) today updated its earnings outlook for the
second quarter and full year 2008. Weakening consumer sentiment in the U.S., the
ongoing correction in the U.S. housing market, and a large and unexpected
Australian tax increase on ready-to-drink spirits products have together created
a more challenging environment for the company's products.

As a result, the company now expects to generate diluted earnings per share
before charges/gains for the second quarter that is down at a
high-teens-to-mid-20s percentage rate compared to diluted EPS of $1.51 before
charges/gains for continuing operations in the year-ago quarter. The company's
previously announced target for the second quarter had been for diluted EPS
before charges/gains to be down at a high-single-digit-to-mid-teens percentage
rate.

The company said it continues to expect that results in the second half of 2008
will be better than the first half, benefiting from factors including
company-wide productivity initiatives and the annualization of increased
brand-building investments. For the full year 2008, the company now expects to
generate diluted EPS before charges/gains that is down at a
high-single-digit-to-high-teens percentage rate compared to $5.06 in 2007. The
company's previous full-year target was for diluted EPS before charges/gains to
be flat to down at a high-single-digit percentage rate versus 2007's results.

                        Challenging Economic Environment

'The environment has become more challenging for our brands and the second
quarter is shaping up to be more difficult than we had anticipated,' said
Fortune Brands president and chief executive officer Bruce Carbonari. 'April was
a solid month that tracked with our expectations, followed by
softer-than-anticipated results in May. We've seen continued softness in June
and it's now clear that we will not make up the May shortfall.

'With the rapid spike in gasoline prices and the decline in consumer confidence,
we're seeing American consumers pull back. At the same time, the correction in
the U.S. housing market has intensified. Together, this means that home
improvement purchases and homebuilding remain soft, that many golfers are
deferring 'big ticket' purchases of golf clubs, and that trading up to premium
spirits brands continues in the U.S. but at a more moderate pace,' Carbonari
continued. 'Meanwhile, higher costs for commodities such as petroleum-based
materials, glass and steel are adding to the pressures facing manufacturers.'

         Large Australia Tax Increase on Ready-to-Drink Spirits Products

'Lastly, in late April - with no advance notice or public debate - the
Australian government increased the tax on ready-to-drink spirits products by
70%, resulting in an instant 25% increase in the price to consumers of our
market-leading Jim Beam RTD products. Jim Beam is the number one spirit of any
kind in Australia, and pre-mixed ready-to-drink products sold in cans and
bottles are a large and profitable business for us. While the RTD tax increase
has driven an increase in full-strength Jim Beam sales in Australia, this hasn't
fully offset the negative impact on our higher margin Jim Beam RTD products.
We're moving aggressively to reposition our RTD business to compete in this new
environment in Australia,' said Carbonari.

'Despite these challenges, we are working hard across Fortune Brands to
outperform our categories, drive returns and create shareholder value. We have a
foundation of powerful consumer brands, we're successfully gaining market share
in key categories, and we continue to see significant growth in international
markets. We've also undertaken aggressive supply-chain initiatives in our home
products business that are reducing cost structures, aligning our manufacturing
capacity with marketplace conditions, and enhancing our flexibility to drive
growth when the home products market recovers,' Carbonari added.

               Second Quarter Results Conference Call on July 25th

'We're continuing to pursue our strategies focused on growth and returns, and we
will further discuss our markets, our performance and our outlook on our second
quarter conference call,' Carbonari concluded. Fortune Brands plans to report
results for the second quarter and hold a conference call on the morning of
Friday, July 25th.

About Fortune Brands

Fortune Brands, Inc. is a leading consumer brands company with annual sales
exceeding $8 billion. Its operating companies have premier brands and leading
market positions in distilled spirits, home and hardware, and golf products.
Beam Global Spirits & Wine, Inc. is the company's premium spirits business.
Major spirits brands include Jim Beam and Maker's Mark bourbon, Sauza tequila,
Canadian Club whisky, Courvoisier cognac, Teacher's and Laphroaig Scotch, and
DeKuyper cordials. Home and hardware brands include Moen faucets, Aristokraft,
Omega, Diamond and Kitchen Craft cabinetry, Therma-Tru door systems, Simonton
windows, Master Lock padlocks and Waterloo tool storage sold by units of Fortune
Brands Home & Hardware LLC. Acushnet Company's golf brands include Titleist,
Cobra and FootJoy. Fortune Brands, headquartered in Deerfield, Illinois, is
traded on the New York Stock Exchange under the ticker symbol FO and is included
in the S&P 500 Index, the MSCI World Index and the Ocean Tomo 300(TM) Patent
Index.

To receive company news releases by e-mail, please visit www.fortunebrands.com.

Forward-Looking Statements

This press release contains statements relating to future results, which are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Readers are cautioned that these forward-looking
statements speak only as of the date hereof, and the company does not assume any
obligation to update, amend or clarify them to reflect events, new information
or circumstances occurring after the date of this release. Actual results may
differ materially from those projected as a result of certain risks and
uncertainties, including but not limited to: competitive market pressures
(including pricing pressures); consolidation of trade customers; successful
development of new products and processes; ability to secure and maintain rights
to intellectual property; risks pertaining to strategic acquisitions and joint
ventures, including the potential financial effects and performance of such
acquisitions or joint ventures, and integration of acquisitions and the related
confirmation or remediation of internal controls over financial reporting;
changes related to the forthcoming privatization of V&S Group; ability to
attract and retain qualified personnel; general economic conditions, including
the U.S. housing market; weather; risks associated with doing business outside
the United States, including currency exchange rate risks; interest rate
fluctuations; commodity and energy price volatility; costs of certain employee
and retiree benefits and returns on pension assets; dependence on performance of
distributors and other marketing arrangements; the impact of excise tax
increases on distilled spirits and wines; changes in golf equipment regulatory
standards and other regulatory developments; potential liabilities, costs and
uncertainties of litigation; impairment in the carrying value of goodwill or
other acquired intangibles; historical consolidated financial statements that
may not be indicative of future conditions and results due to the recent
portfolio realignment; any possible downgrades of the company's credit ratings;
as well as other risks and uncertainties detailed from time to time in the
company's Securities and Exchange Commission filings.

Use of Non-GAAP Financial Information

This press release includes diluted earnings per share before charges/gains, a
measure not derived in accordance with generally accepted accounting principles
('GAAP'). This measure should not be considered in isolation or as a substitute
for any measure derived in accordance with GAAP, and may also be inconsistent
with similar measures presented by other companies. Reconciliation of this
measure to the most closely comparable GAAP measure, and reasons for the
company's use of this measure, are presented in the attached table.

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----------------------------------------------------------------------
                         FORTUNE BRANDS, INC.
   Reconciliation of Diluted EPS from Continuing Operations Before
 Charges/Gains Targets to GAAP Diluted EPS from Continuing Operations
                                Targets
 For the Three Months Ending June 30, 2008 and Twelve Months Ending
                           December 31, 2008
                             (Unaudited)
----------------------------------------------------------------------

The table below lists estimated ranges for Diluted EPS from Continuing
 Operations Before Charges/Gains and Diluted EPS from Continuing
 Operations on a GAAP basis for the three months ending June 30, 2008
 and twelve months ending December 31, 2008. In addition, the Company
 may incur certain potential charges and gains that may impact Diluted
 EPS from Continuing Operations on a GAAP basis.


----------------------------------------------------------------------
                        Diluted EPS from         Diluted EPS from
                      Continuing Operations     Continuing Operations
                      Before Charges/Gains          (GAAP basis)
                    --------------------------------------------------
Fortune Brands
------------------

Three Months Ending
 June 30, 2008           down high-teens          down high-teens
                     to-mid-20s percentage     to-mid-20s percentage
                               rate                     rate

Twelve Months Ending
 December 31, 2008   down high-single-digit    down mid-single-digit
                    to-high-teens percentage  to-high-teens percentage
                               rate                     rate


----------------------------------------------------------------------


Diluted EPS from Continuing Operations Before Charges/Gains is Net
 Income calculated on a per-share basis excluding restructuring,
 restructuring-related and one-time items.

Diluted EPS from Continuing Operations Before Charges/Gains is a
 measure not derived in accordance with GAAP. Management uses this
 measure to evaluate the overall performance of the company and
 believes this measure provides investors with helpful supplemental
 information regarding the underlying performance of the company from
 year to year. This measure may be inconsistent with similar measures
 presented by other companies.
*T

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*T
Media Relations:
Clarkson Hine
(847) 484-4415
or
Investor Relations:
Tony Diaz
(847) 484-4410
*T
                                                                

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