H.B. Fuller Company (FUL) Q1 2026 earnings summary

Executive summary

• Organic revenue declined 6.6% year-over-year, with positive pricing offset by lower volumes and significant supply chain disruptions from Middle East conflict leading to raw material shortages and inflationary pressures.

• Adjusted EBITDA rose 4% year-over-year to $119 million, reaching the high end of guidance, while adjusted EPS increased 6% to $0.57.

• Gross margin improved by 170–180 basis points year-over-year, driven by higher product pricing, cost management, and restructuring actions.

• Net income attributable to shareholders rose to $21.0 million from $13.2 million in Q1 2025.

• Project Quantum Leap restructuring savings increased to $15 million for 2026 and continues to deliver margin expansion.

Financial highlights

• Net revenue was $771 million, down 2.3% year-over-year, with organic revenue declining 6.6%.

• Adjusted EBITDA margin expanded 90 basis points to 15.4%; adjusted gross profit margin was 31.3%, up 170 basis points.

• Adjusted net income was $32 million for the quarter; net income attributable to shareholders was $21.0 million.

• Cash flow from operations improved by $49 million year-over-year.

• Free cash flow was $(61.7) million, reflecting higher capital expenditures.

Outlook and guidance

• Fiscal 2026 net revenue expected to rise mid-single digits, with organic revenue up low single digits versus 2025.

• Adjusted EBITDA guidance raised to $645 million–$675 million; adjusted EPS expected at $4.55–$4.90.

• Q2 2026 net revenue expected up low single digits; adjusted EBITDA forecasted at $175 million–$185 million.

• Management expects restructuring costs to continue into fiscal 2026 and 2027, with the majority of charges recognized in 2026.

• Pricing actions, including a minimum 10% global price increase effective April 1, are expected to offset raw material inflation.