H.B. Fuller Q3 2026 Earnings: Pricing Lifts Adjusted EBITDA Margin to 19.9%

H.B. Fuller (NYSE: FUL) reported fiscal Q3 2026 revenue of $938.2 million for the quarter ended August 29, up 5.2% year over year, while diluted GAAP EPS rose to $1.44 from $1.22. Pricing offset lower volume at the revenue line, while pricing execution and restructuring savings lifted adjusted EBITDA margin by 80 basis points to a record 19.9%.

Core Earnings Results

Organic revenue increased 4.4% as a 7.4% contribution from pricing more than offset lower volume. Foreign-currency translation and acquisitions added another 0.7% and 0.1%, respectively, to reported revenue growth.

Profit increased faster than revenue. GAAP gross margin expanded by 120 basis points to 33.2%, while adjusted gross margin reached 33.5%, also up 120 basis points. Adjusted net income rose to $83.4 million, supporting 21% growth in adjusted diluted EPS.

Adjusted net income, adjusted EPS, adjusted EBITDA and related margins are non-GAAP measures.

Business and Segment Performance

All three global business units increased revenue, adjusted EBITDA and adjusted EBITDA margin. Hygiene, Health and Consumable Adhesives produced the fastest revenue and adjusted EBITDA growth, while Engineering Adhesives remained the highest-margin segment.

The segment results indicate that margin improvement was broad rather than concentrated in one business. Hygiene, Health and Consumable Adhesives recorded the largest increase at 70 basis points, while the other two segments each expanded by 50 basis points.

Pricing Offset Volume Pressure and Expanded Margins

The quarter’s growth remained price-led: pricing added 7.4% to revenue, but organic growth was only 4.4% because volume declined. That distinction matters because the fiscal 2026 outlook continues to assume a low-single-digit volume decline, leaving pricing as the main top-line driver.

Pricing execution also helped offset higher raw-material costs, according to management. Together with restructuring savings, it raised adjusted gross margin by 120 basis points and adjusted EBITDA margin by 80 basis points. Adjusted SG&A expense still increased 8% year over year to $183 million, although it declined 7% sequentially because of expense timing.

Cash Flow and Balance Sheet

Year-to-date cash flow from operations increased 17% to $183 million. This is a nine-month figure rather than a quarterly result. Net working capital rose to 18.5% of annualized revenue, up 150 basis points, as the company made strategic inventory investments for its Quantum Leap program and to protect supply continuity amid Middle East disruptions.

Net debt ended the quarter at $1.96 billion, approximately unchanged from a year earlier. Net debt to adjusted EBITDA improved to 3.0 times from 3.3 times, indicating that higher trailing earnings reduced leverage even though the absolute debt balance remained broadly flat.

GAAP interest expense increased to $40.9 million from $33.6 million. The increase represents a continuing cost against earnings and cash generation, particularly as the company works toward closing the AMS acquisition.

Fiscal 2026 Guidance

H.B. Fuller updated its fiscal 2026 outlook following its year-to-date performance. Revenue growth and operating cash flow expectations were reaffirmed, while the company provided updated ranges for adjusted EBITDA, adjusted EPS and its core tax rate. The release did not include the previous numerical ranges for those updated measures.

Management Perspective

CEO Celeste Mastin said pricing actions are offsetting higher raw-material costs and restructuring is improving operating leverage. Management remains focused on reaching an adjusted EBITDA margin above 20%; the third-quarter result of 19.9% placed the company close to that target. H.B. Fuller also anticipates closing the AMS acquisition before the end of fiscal 2026 while continuing its Quantum Leap operating program.

Recent Insider Transactions

The supplied six-month insider data shows 18,389 shares acquired through five transactions and 9,561 shares sold through one transaction, resulting in net acquisitions of 8,828 shares. The acquisition total includes derivative exercises and a stock award, so it should not be treated entirely as open-market buying.

These transactions are presented as reported and do not, on their own, establish insiders’ views about the company’s outlook.

Risks Investors Need to Watch

• Dependence on pricing: Lower volume offset part of the 7.4% pricing contribution, and full-year guidance continues to call for a low-single-digit volume decline. Weaker price realization would reduce the company’s ability to sustain revenue growth.
• Raw-material cost pressure: Management said pricing is currently offsetting higher raw-material costs, but a change in that relationship could pressure gross and adjusted EBITDA margins.
• Working-capital requirements: Inventory investments raised working capital as a percentage of annualized revenue by 150 basis points. Continued supply-chain disruption could require additional inventory and limit cash conversion.
• Debt and acquisition execution: Net debt remained approximately $1.96 billion and interest expense increased year over year. The anticipated AMS closing adds acquisition execution and financing considerations as H.B. Fuller works to reduce leverage.

Summary

H.B. Fuller’s fiscal third quarter was defined by price-led revenue growth and broader margin expansion across all three business units. Pricing execution and restructuring savings outweighed volume and cost pressure, bringing adjusted EBITDA margin to 19.9%, while year-to-date operating cash flow and leverage also improved. The main issues to monitor are whether margins can move sustainably above 20%, whether volume stabilizes, and how inventory requirements and the AMS acquisition affect cash flow and debt.