Despite Uncertain Macro Outlook, 3M Executives Stick to Sales Growth Target
Citing a growing backlog and order volumes that have persisted into the first three weeks of this month, the leaders of 3M Co. have reiterated their 2026 organic sales growth target of 3% even though that metric clocked in at just 1.2% in the first quarter.
Speaking to analysts and investors on April 21 after 3M reported Q1 operating profits of $1.4 billion (versus $1.25 billion in early 2025) on sales of $6.0 billion, Chairman and CEO Bill Brown said the start to the year brought with it both “pockets of macro pressure” and “encouraging order trends” that give him and his team confidence that top-line growth will pick up as the year progresses. A breakdown of sales by segment shows that duality:
- 3M’s sales of industrial adhesives and tapes grew to $604 million during the quarter compared to $543 million in last year’s Q1
- Personal safety products also put up strong growth, with net sales climbing to $912 million from $850 million
- Sales of commercial branding and transportation products also rose, to $640 million from $616 million
- Less positive were most of the divisions inside 3M’s consumer business unit: Home and auto care goods did well, climbing 10% year over year to $328 million, but weakness in consumer safety and packaging products contributed the group’s total revenues being essentially flat around $1.13 billion.
Still, Brown said underlying activity looks good and hasn’t shown any signs of being restrained by the Iran war and its effects on energy prices. (The 3M team still has, however, a costs contingency of roughly $25 million to $80 million in its 2026 profitability projects to cover oil price and macroeconomic swings.) He also noted that part of his positive outlook comes from successes of recently developed products and sales teams’ efforts to win new business and cross-sell products.
“We’re not really a backlog-driven business but backlog was very strong coming out of Q1 and continues to build into Q2,” Brown said on a conference call. “Over the course of the quarter, we saw good order growth in January and February, kind of up mid-single digits. But it accelerated quite a bit in the month of March.”
How much order growth is being pulled forward?
The orders optimism from 3M echoes similar recent assessments from industrial and construction suppliers Fastenal and MSC Industrial Supply. Also striking an upbeat tone on April 21 were executives from Genuine Parts Co., which runs the $9 billion Motion Industries business alongside its well-known automotive parts group led by the NAPA brand.
CEO Will Stengel told analysts on his team’s conference call that 10 of Motion’s 14 end markets grew in the first quarter, an increase from nine late last year and just three in the early part of 2025.
“During the quarter, we saw notable growth in food products, automotive, iron and steel, mining and fabricated metals,” Stengel said. “This growth was slightly offset by softer demand in pulp and paper, lumber and wood and rubber and plastic.”
What can’t be clear yet is just how much of the solid order growth is attributable to customers looking to get ahead of price increases already announced and others likely to come thanks to the energy and supply-chain impacts of the Iran war.
Brown said inventory levels at the company’s distributors are generally in line, if maybe a bit light, with historical levels but also acknowledged that 3M is “pushing pricing a little bit more aggressively” because of oil prices. In addition to its typical April 1 price increase, the company is planning another increase soon, which Brown noted could be spurring some pre-buying.
“We’ll see acceleration into Q2 and then in the back half […] And any prebuy that’s happened will wash out in Q2,” Brown said before later adding that, “We’ll know more in the next month, six weeks, how much of that might be prebuy.”
Shares of 3M (Ticker: MMM) fell 2% to about $148 after executives’ earnings report. Over the past six months, they have lost about 10% of their value, trimming the company’s market value to about $78 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas Journal, T&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.