On March 27, 2025, H.B. Fuller Co (FUL, Financial) released its 8-K filing detailing the financial results for the first quarter of fiscal 2025. The company reported net revenue of $789 million, surpassing the analyst estimate of $769.19 million. However, its reported EPS of $0.24 fell short of the estimated $0.95. Adjusted EPS was $0.54.
Company Overview
H.B. Fuller Co is a global manufacturer and supplier of adhesives, sealants, and other chemical-based products. The company operates through three segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives, and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment is the largest revenue generator, providing specialty industrial adhesives for various markets, including packaging and hygiene products. Approximately half of the company's revenue is generated in the United States.
Performance and Challenges
H.B. Fuller Co's net revenue for Q1 2025 was $789 million, a 2.7% decline year-on-year, primarily due to unfavorable foreign currency translation and the divestiture of the flooring business. However, organic revenue increased by 1.9%, driven by a 1.7% rise in volume and a 0.2% increase in pricing. The company's gross margin was 28.8%, with an adjusted gross margin of 29.6%, slightly down due to increased raw material costs.
Financial Achievements
The company achieved an adjusted EBITDA of $114 million, representing a 14.5% margin, although this was a 7% decrease from the previous year. The decline was attributed to higher raw material costs and increased variable compensation. Despite these challenges, H.B. Fuller Co repurchased 678 thousand shares during the quarter, demonstrating confidence in its long-term strategy.
Key Financial Metrics
H.B. Fuller Co reported a net income of $13 million for the quarter, with adjusted net income at $30 million. The adjusted gross profit was $233 million, and adjusted SG&A expenses were $169 million, up 2% year-on-year due to acquisitions and higher variable compensation. The company's net debt increased to $2,074 million, driven by acquisitions, with a net debt-to-adjusted EBITDA ratio of 3.5x.
“I am encouraged by our first quarter financial performance and positive organic sales growth,” said Celeste Mastin, president and chief executive officer. “Despite weak overall market demand conditions, we remain focused on pricing discipline, market share gains, and effectively managing our cost structure.”
Analysis and Outlook
H.B. Fuller Co's performance in Q1 2025 highlights the challenges posed by external factors such as currency fluctuations and raw material costs. However, the company's ability to achieve organic revenue growth and maintain a strong adjusted EBITDA margin underscores its resilience and strategic focus. The company's outlook for fiscal 2025 remains cautious, with expectations of net revenue growth adjusting for divestitures. The focus on optimizing the portfolio mix and streamlining manufacturing costs is expected to drive future growth.
| Metric | Q1 2025 | Analyst Estimate |
|---|---|---|
| Net Revenue | $789 million | $769.19 million |
| Reported EPS | $0.24 | $0.95 |
| Adjusted EPS | $0.54 | - |
For more detailed insights and analysis, visit the full earnings report on the SEC's website through the provided link.
Explore the complete 8-K earnings release (here) from H.B. Fuller Co for further details.
