H.B. Fuller Adjusts FY24 Outlook: Delayed Orders And Rising Costs Weigh On Results

On Thursday, H. B. Fuller Company FUL disclosed its unaudited preliminary financial results for fiscal year 2024, highlighting weaker-than-expected conditions in the fourth quarter.

The company now projects fiscal year 2024 net revenue to reach approximately $3.57 billion versus $3.576 billion estimate (prior view: ~$3.581 billion), with adjusted earnings per share of $3.84 versus the analyst consensus estimate of $4.16 (prior view: $4.10 to $4.20).

The company currently expects Adjusted EBITDA of approximately $594 million, representing a revision from previous guidance, which had forecasted adjusted EBITDA in the range of $610 million to $620 million.

The fourth-quarter performance was negatively impacted by delayed customer orders and weaker-than-expected demand in key sectors, including consumer product goods, packaging, and durable goods distribution.

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Additionally, the shift in price increase realization into fiscal 2025 and rising raw material costs, particularly in Hygiene, Health, and Consumable Adhesives, contributed to the decline in adjusted EBITDA.

Celeste Mastin, President and CEO, acknowledged the market slowdown and emphasized the company's response, including new pricing actions, cost controls, and ongoing restructuring initiatives to streamline manufacturing and reduce operating costs.

H. B. Fuller also expects operating cash flow to be approximately $300 million for fiscal 2024, down from the prior outlook of $325 million – $350 million.

The company will release its full financial results on January 15, 2025, followed by an investor conference call on January 16, 2025, to discuss the results.

Price Action: FUL shares are trading lower by 6.14% to $63.34 at last check Thursday.

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