H. B. Fuller Company ( FUL ) shares are trading lower after the company reported worse-than-expected third-quarter results and revised its FY24 guidance downwards.

Net revenue of $917.93 million missed the consensus of $944.3 million. Organic revenue experienced modest growth, with pricing adjustments causing a 2.6% decline and volume contributing a 3.0% increase.

Adjusted gross profit was $279 million, with an adjusted gross profit margin of 30.4%, representing a 40 basis point increase from the previous year. 

Gross profit was driven by volume leverage, restructuring savings, and benefits from acquisitions.

Adjusted EBITDA rose 6% Y/Y to $165 million, fueled by volume growth, restructuring savings, and advantages from recent acquisitions, with adjusted EBITDA margin expanded by 70 basis points Y/Y to 18.0%.

Adjusted EPS of $1.13 missed the consensus of $1.23.

At the end of the third quarter of fiscal 2024, net debt stood at $1.890 billion. The company repurchased 225,000 shares during the quarter.

FY24 Outlook: H.B. Fuller ( FUL ) reduced its adjusted EPS forecast to $4.10 – $4.20 (prior view $4.20 to $4.45), compared to the consensus of $4.37.

Also, the company projects net revenue growth of around 2% (prior view: up 2% to 4%), with organic revenue remaining flat (prior flat to up 2%) year-on-year for the year.

H.B. Fuller President and CEO Celeste Mastin said, “Our volume growth during the quarter was impacted by slowing market demand in certain durable goods markets in EA, and we are adjusting our full year outlook accordingly.”

”While this quarter’s volume growth was at the low end of our expectations, we have a clear and focused strategy and a highly engaged team that is well equipped to execute and drive business success. We remain on track to deliver upon our long-term EBITDA margin and organic growth targets.”

Price Action: FUL shares are down 6.98% at $75.00 premarket at the last check Thursday.

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