Investing.com -- Shares of Henkel (ETR:HEN3) edged down 0.5% as the market responded to a challenging volume growth environment highlighted by HB Fuller (NYSE:FUL) in their FQ4 earnings report.
The adhesive technologies company, Henkel, saw its stock price adjust after its peer reported a slight decline in organic sales and a drop in gross margin, raising concerns about the broader industry.
HB Fuller's FQ4 earnings, released yesterday evening for the quarter ending November 24, showed a marginal organic sales decline of 0.2%, which was better than the Visible Alpha consensus of a 0.7% drop.
However, this represented a slowdown from the 0.4% growth seen in the previous quarter. The company's CEO pointed to an "unexpected deceleration" in volume across most end markets. HB Fuller also noted a "challenging volume growth environment in 2025," an outlook that appears to have impacted Henkel's share price.
Despite efforts to implement pricing actions and cost controls, HB Fuller was unable to fully mitigate the effects of higher raw material costs, resulting in a year-over-year decrease in gross margin of 170 basis points to 29.6%. These results have implications for Henkel, which is projected to have a 2.8% organic sales growth in its Adhesive Technologies for FY25, according to the company's forecasts.
UBS analysts commented on the situation, stating, "Overall, we view FUL's print as a negative read across to Henkel, as it points to some downside risk to consensus volume estimates and seems supportive of our view that Henkel's margin upgrade cycle is now largely over."
Investors appear to be taking note of the challenges faced by HB Fuller as a potential indicator of what may lie ahead for Henkel. With organic sales growth guidance for 2025 ranging from 0% to 2%, below the Visible Alpha consensus of 2.8%, the market seems to be adjusting expectations for Henkel accordingly.
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