How did Fuller's revenue and expenses shift in Q1 2025?

H.B. Fuller's revenue and expenses in Q1 2025 showed a decline in total revenue but an increase in organic revenue and EBITDA, despite higher expenses.

1. Total Revenue Decline: The company's net revenue decreased by 2.7% to $789 million compared to the previous year, primarily due to unfavorable foreign currency translations and the divestiture of its flooring business.
2. Organic Revenue Growth: Organic revenue, which excludes the impact of acquisitions and divestitures, increased by 1.9% year-on-year, driven by improved volumes and moderate pricing gains. This indicates a positive trend in the company's core business.
3. EBITDA Performance: The adjusted EBITDA for the quarter was $114 million, representing a 7% decline from the previous year, resulting in an EBITDA margin of 14.5%. This decline was due to higher raw material costs, which more than offset the positive pricing and volume leverage.
4. Expense Management: The adjusted gross profit margin decreased to 29.6%, down 50 basis points from the previous year, due to higher raw material costs. Adjusted operating expenses rose by 2%, influenced by acquisitions and higher compensation costs, although these were partially offset by favorable foreign exchange impacts.
5. Share Repurchases: The company actively managed its capital structure, repurchasing 678,000 shares during the quarter, reflecting its commitment to returning value to shareholders.

In conclusion, while H.B. Fuller faced challenges such as weak market demand and rising raw material costs, it maintained strategic pricing and market share gains, and continued its cost management efforts. The company remains optimistic about achieving growth in organic sales and EBITDA for the year, with an eye on expanding its EBITDA margin.