3M products at a Home Depot in San Rafael, California, April 30, 2024.
Justin Sullivan | Getty Images
Industrial giant 3M forecast annual profit slightly below Wall Street’s expectation on Tuesday, pointing to a challenging and uneven demand backdrop, even as it tightens costs to shield margins.
Shares of the Saint Paul, Minnesota-based company fell 3.4% in morning trade.
Weak demand in the United States, softer retail markets and discretionary spending pressures continued to weigh on the company’s consumer segment, home to products such as Scotch tape and Post-it notes.
Fourth-quarter sales at the segment, which made up more than 20% of the company’s 2024 revenue, fell 1.2% from a year ago — in contrast to a rise in 3M’s remaining business segments.
The U.S. consumer sentiment index deteriorated in November and December, highlighting moderation in spending after it surged in the third quarter, as anxiety over jobs and the economic outlook grew.
The challenging macroeconomic environment continued to pressure 3M’s roofing granules and automotive aftermarket businesses, though this was partially offset by improved performance across its broader industrial segments.
The company forecast 2026 adjusted profit of between $8.50 and $8.70 per share, with the midpoint falling 1 cent below the estimates of $8.61, according to data compiled by LSEG.
However, 3M’s cost cuts, price hikes and the introduction of new products under CEO Bill Brown have helped the company cushion margins from weak demand against a prolonged inflationary backdrop.
In 2025, 3M added 284 new products, a 68% rise from last year.
The company’s adjusted profit stood at $1.83 per share during the period, compared with analysts’ estimate of $1.80 per share.
“Our accelerated pace of innovation and commercial execution positions us to outperform the macro environment again in 2026,” CEO Brown said in a statement.
3M reported a fourth-quarter operating margin of 23.4%, up from 21.4% the year earlier. It targets an operating margin of 25% by the end of 2027.
It posted quarterly adjusted revenue of $6.02 billion, slightly above LSEG-compiled estimates of $6.01 billion.