3M forecasts annual profit below estimates amid sluggish consumer demand

The logo for 3M appears on a screen above the trading floor of the New York Stock Exchange (AP Photo/Richard Drew, File)

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 7.5 per cent 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, resulting in a 1.2 per cent fall in segment sales in the October-to-December period, from a year ago.

• Latest updates on company news here

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.

3M’s roofing granules and automotive aftermarket businesses are expected to remain pressured by the challenging macroeconomic environment in the beginning of 2026, CEO Bill Brown said during an earnings call on Tuesday.

However, on the call, CFO Anurag Maheshwari further noted 3M expects “the macro in 2026 to be a little bit better.”

3M’s cost cuts, price hikes and the introduction of new products under CEO Brown have helped the company cushion margins from weak demand against a prolonged inflationary backdrop.

• Latest updates on investing here

3M reported quarterly operating margin of 23.4 per cent, up from 21.4 per cent the year earlier. It targets an operating margin of 25 per cent by the end of 2027.

The company forecast 2026 adjusted profit between $8.50 and US$8.70 per share, with the midpoint a cent short of analysts’ estimate of US$8.61, according to data compiled by LSEG.

Brown said that the existing 20 cents impact from tariffs is embedded in the profit forecast range.

• Latest economic news on BNNBloomberg.ca

If U.S. President Donald Trump’s recent tariff hike vows on eight European nations over Greenland play out, Brown added it could result in a US$30 to US$40 million impact this year.

The company’s adjusted profit stood at US$1.83 per share during the fourth quarter, compared with analysts’ estimate of US$1.80 per share.

Quarterly adjusted revenue of US$6.02 billion, came slightly above estimates of US$6.01 billion.

---

Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Devika Syamnath and Shailesh Kuber