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FUL NYSE· H.B. Fuller Company
Earnings report Q4 2023

H.B. Fuller Reports Decrease in Revenue for Latest Quarter

Segments of revenue

H.B. Fuller's net revenue for the latest quarter was $3.51 billion, representing a 6.4% decrease compared to the previous year. This decline was primarily driven by an 8.4% decrease in sales volume and a 2.4% decrease due to currency fluctuations. However, it was partially offset by a 3.3% increase due to acquisitions and a 2.9% increase in product pricing. Additionally, the company experienced a 1.8% decrease in revenue due to the extra week in the previous year.

Strengths

Despite the decrease in revenue, H.B. Fuller demonstrated an improvement in gross profit margin, which increased to 28.7% in the latest quarter from 25.7% in the previous year. This improvement was attributed to an increase in product pricing and lower raw material costs, partially offset by the impact of lower sales volume. The company's management highlighted the positive impact of these factors on the company's profitability.

Challenges

The decrease in sales volume and the unfavorable impact of currency fluctuations pose challenges for H.B. Fuller. The 8.4% decrease in sales volume indicates a decline in demand for the company's products. Additionally, the weakening of the Japanese yen against the U.S. dollar negatively affected the income from the company's joint venture in Japan.

Noteworthy

H.B. Fuller generated $378.4 million in cash flow from operating activities in the latest quarter, compared to $256.5 million in the previous year. This increase in cash flow indicates improved operational efficiency and financial performance. However, it should be noted that the company's total year organic revenue growth decreased by 5.5% compared to the previous year.

Summary

H.B. Fuller reported a decrease in revenue for the latest quarter, primarily driven by a decrease in sales volume and the impact of currency fluctuations. However, the company demonstrated strengths in improving gross profit margin, driven by higher product pricing and lower raw material costs. The increase in cash flow from operating activities also indicates improved operational efficiency. Challenges remain in addressing the decline in sales volume and mitigating the impact of currency fluctuations. Overall, H.B. Fuller's financial performance in the latest quarter reflects a mixed performance with areas of strength and challenges.

Source documents

Form 10-K  filed on Jan 24, 2024
118 pages scanned

Reference data

Company financials Q4 revenue 903M
Analyst estimates Q4 EPS beat by 3.73%
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