H.B. Fuller Company (FUL) Q1 2025 earnings summary

Executive summary

• Organic revenue grew 1.9% year-over-year in Q1, driven by positive volume trends and pricing discipline, despite weak market conditions and negative currency effects.

• Net revenue for Q1 2025 was $788.7M, down 2.7% year-over-year, impacted by currency and divestitures; adjusted EBITDA was $114M with a 14.5% margin.

• Adjusted EPS was $0.54, down from prior year due to lower operating income; net income was $13.2M.

• Strategic focus remains on market share gains, cost management, and portfolio optimization, with share buybacks prioritized over M&A due to elevated leverage.

• Major acquisitions included ND Industries and others, while the North American Flooring business was divested.

Financial highlights

• Adjusted gross profit margin was 29.6%, down 50 bps year-over-year due to higher raw material costs; gross margin was 28.8%.

• Adjusted EBITDA of $114M, down year-over-year, impacted by raw material costs and FX; adjusted EBITDA margin was 14.5%.

• Adjusted EPS was $0.54, down from prior year; net income declined 57% to $13.2M.

• Cash flow from operations declined due to higher working capital needs; free cash flow after dividends was negative.

• 678,000 shares were repurchased in Q1.

Outlook and guidance

• FY2025 net revenue expected to decline 2%-4%; excluding divestiture, up 1%-2%; organic revenue flat to up 2%.

• Adjusted EBITDA guidance: $600M-$625M (1%-5% growth); adjusted EPS $3.90-$4.20 (2%-9% growth).

• Operating cash flow for FY2025 expected at $300M-$325M, weighted to H2.

• Q2 2025 adjusted EBITDA expected at $150M-$160M.

• Restructuring plans to be completed by fiscal 2026, with total pre-tax costs of $60–65M.