H.B. Fuller's fiscal Q3 revenue rose 5.2% to $938.2M as 7.4 points of pricing offset a 3.0-point volume decline; diluted EPS rose 18% to $1.44, helped by a $19.7M currency-hedge gain tied to the pending AMS acquisition.
Revenue
$938M
+5.2% YoY
Net income
$79M
+17.9% YoY
Diluted EPS
$1.44
+18.0% YoY
Operating margin
12.1%
Price increases carried the quarter as volumes kept falling
H.B. Fuller, which makes industrial adhesives for diapers, packaging, electronics, cars and building products, grew net revenue 5.2% to $938.2 million in its fiscal third quarter (the three months ended August 29, 2026). Almost all of that came from charging customers more. Pricing added 7.4 percentage points to growth. Currency added 0.7 points and acquisitions 0.1 points. Sales volume, meaning how much product the company actually shipped, subtracted 3.0 points.
Net income attributable to H.B. Fuller rose 17.9% to $79.2 million, and diluted EPS rose from $1.22 to $1.44. The EPS figure is flattered by a one-off gain. The quarter includes a $19.7 million unrealized gain on a currency contract taken out to lock in the dollar cost of a pending UK acquisition (details below). That gain is booked in "other income," not in the operating business. On the company's own adjusted basis, which strips this gain out along with restructuring and deal costs, net income rose 20.3% to $83.4 million. The underlying business therefore improved by about as much as the GAAP figure suggests, but for different reasons.
Key figures
Metric
Q3 FY2026
Q3 FY2025
YoY Change
Net revenue
$938.2M
$892.0M
+5.2%
Organic revenue growth (price + volume)
+4.4%
n/a
n/a
of which: pricing
+7.4 pts
n/a
n/a
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of which: sales volume
−3.0 pts
n/a
n/a
Currency effect
+0.7 pts
n/a
n/a
Gross margin
33.2%
32.0%
+120 bps
Operating margin (gross profit less SG&A)¹
12.1%
12.3%
−30 bps
Adjusted EBITDA
$186.7M
$170.6M
+9.4%
Adjusted EBITDA margin
19.9%
19.1%
+80 bps
Net income attributable to H.B. Fuller
$79.2M
$67.2M
+17.9%
Diluted EPS
$1.44
$1.22
+18.0%
¹ H.B. Fuller does not report an operating income line. This is gross profit ($311.7M vs. $285.1M) minus selling, general and administrative expenses ($198.5M vs. $175.0M), divided by revenue. "Organic" growth means growth excluding acquisitions and currency swings, so it shows how the existing business did on its own. "Adjusted EBITDA" is the company's preferred profit measure: earnings before interest, tax, depreciation and amortization, excluding restructuring, deal and ERP-system costs.
Nine months (year to date): revenue $2,659.3M (+3.1%), with organic growth of only +0.4% (pricing +3.7 pts, volume −3.3 pts) and currency adding +2.4 pts. Gross margin was 32.6% vs. 31.0%. Net income was $168.0M vs. $122.2M (+37.6%), and diluted EPS $3.05 vs. $2.21 (+38.0%). Year-to-date comparisons are helped by the prior year's $11.2 million discrete tax charge and $13.9 million of acquisition project costs.
Where the margin gain came from, and where it went
Gross margin (the share of revenue left after the direct cost of making the product) rose 120 basis points to 33.2%. The 10-Q splits this into two parts:
Raw materials fell 40 bps as a share of revenue "primarily due to higher product pricing partially offset by higher raw material costs." Input costs went up, and H.B. Fuller raised prices by more.
Other manufacturing costs fell 80 bps, "primarily due to higher product pricing and the impact of restructuring actions." The company has two restructuring programs running, including a global manufacturing-footprint optimization (see Outlook).
Most of that gain did not reach operating profit. SG&A (overhead: sales, administration, corporate) rose 13.4% to $198.5M, or 21.2% of revenue vs. 19.6%. Management attributes this to "higher compensation expense and a weaker U.S. dollar." As a result, the gross-profit-less-SG&A margin slipped from 12.3% to 12.1% even though gross margin improved. Adjusted EBITDA margin still rose 80 bps, because that measure excludes restructuring, deal and ERP-project costs and adds back depreciation.
Segment results
Segment
Q3 revenue
YoY
Organic
Currency
Adj. EBITDA
Adj. EBITDA margin (vs. prior yr)
Hygiene, Health & Consumable Adhesives
$413.0M
+7.0%
+6.4%
+0.6 pts
$72.8M (+11.5%)
17.6% (16.9%)
Engineering Adhesives
$278.7M
+2.4%
+0.7%
+1.3 pts
$66.4M (+4.7%)
23.8% (23.3%)
Building Adhesive Solutions
$246.5M
+5.5%
+5.2%
+0.3 pts
$44.8M (+8.0%)
18.2% (17.7%)
Hygiene, Health & Consumable (HHC): adhesives for diapers, medical products and packaging. It had the biggest swing. Organic growth was +6.4% in the quarter against −0.1% year to date, driven by pricing and "partially offset by a decrease in sales volume." Segment EBITDA rose 11.5% on higher pricing and "slightly lower manufacturing costs," partly offset by higher distribution and compensation costs.
Engineering Adhesives: electronics, automotive, solar and industrial assembly. This is the highest-margin segment and was the slowest this quarter, with organic growth of only +0.7%. More than half of its 2.4% reported growth came from currency (a stronger Chinese renminbi) and the ND Industries Turkey acquisition (+0.4 pts). On August 26 it added Dongguan Nako, a Chinese fastener-coating business bought for about $10.4M.
Building Adhesive Solutions: roofing, construction and flooring products. Organic growth was +5.2%, again from pricing net of lower volume. The segment's EBITDA rose 8.0%, with higher manufacturing, distribution and compensation costs holding back the margin gain.
The filing describes every segment the same way: price up, volume down.
The pending AMS acquisition
On June 25, 2026, H.B. Fuller agreed to buy Advanced Medical Solutions Group plc (AMS), a UK maker of wound-closure and surgical adhesive products. The cash offer is 285 pence per share, valuing its equity at about £659 million (enterprise value about £715 million). AMS shareholders approved the deal on August 12, and it is expected to close by the end of calendar 2026, subject to regulatory approvals. This deal explains three unusual lines in the quarter:
The $19.7M currency gain. H.B. Fuller took out a £675 million forward contract to fix the dollar cost of the purchase price. The pound strengthened, so the contract gained value. It is unrealized and not designated as an accounting hedge, so it went straight into earnings. It will move again next quarter and should not be treated as recurring profit.
Higher interest expense. Interest expense rose 21.7% to $40.9M, "primarily due to higher debt levels and debt extinguishment costs." In July the company refinanced its bank facilities: a $420M Term Loan A and a revolver raised to $800M, both now maturing in 2031. It also holds a $917M unsecured bridge loan commitment for the deal, undrawn at quarter end.
Higher tax rate. The effective tax rate was 24.4% vs. 19.9% a year ago. Excluding discrete items (a $2.1M benefit this year vs. $3.7M last year) the rate was 26.4% vs. 24.4%.
Total debt was $2,054.5M at quarter end, and cash was $97.2M. Debt-to-capital improved to 48.7% from 51.5% a year earlier. Funding the AMS deal will push leverage back up after closing.
Cash flow and working capital
Operating cash flow for the nine months was $182.6M vs. $156.8M. Capital spending rose to $141.7M from $94.6M, which the company attributes to "growth initiatives." That cut year-to-date free cash flow (operating cash flow minus capital spending) to $40.9M from $62.2M. Working capital also grew. Inventory days on hand rose to 88 from 78, and receivable days to 63 from 58. Inventory absorbed $106.4M of cash vs. $42.1M a year earlier, "due to higher inventory purchases." Rising stock levels while shipped volumes are falling is worth watching.
Takeaway: H.B. Fuller's earnings growth this quarter came from price, not demand. Pricing added 7.4 points and volume took away 3.0, and every segment followed that pattern. Gross margin improved, but higher pay and overhead absorbed most of it before operating profit. The 18% EPS gain also includes a $19.7M paper gain on a currency hedge for the AMS deal. The quality of the result depends on whether volumes stabilize once these price increases are in the base.
Outlook
The 10-Q gives no numeric earnings guidance. What the filing does set out:
Restructuring. The 2023 restructuring plan has incurred $85.2M of an expected $87–90M in costs and is close to complete. The global footprint program launched in Q4 2025 expects $45–50M in costs, has incurred $11.6M so far, and runs through fiscal 2028. Most of its charges and cash payments fall in fiscal 2026–2027, so restructuring costs will stay elevated for several quarters.
AMS closing by calendar year-end would add a medical adhesives business and a large amount of new debt. The first full quarter of AMS results, and of the related interest cost, would appear in fiscal 2027.
In our view, the pricing gains are real and show up in gross margin. But volume has fallen both in the quarter (−3.0 pts) and year to date (−3.3 pts), so revenue growth depends on price increases continuing. Once a year has passed, the increases are already in the prior-year comparison and stop adding to growth. The main things to watch in the fourth quarter (fiscal year ends November 28, 2026) are whether volume turns positive and whether SG&A growth slows back toward revenue growth.