Avery Dennison Earnings Call Transcripts
Fiscal Year 2026
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The meeting saw all director nominees elected, executive compensation and auditor ratification approved, and a 6% dividend increase announced. A shareholder proposal for an independent board chairman was not approved. Q&A addressed recent share price concerns.
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First quarter 2026 saw 7% adjusted EPS growth and strong cash flow, with materials group offsetting softer solutions group results. Inflation and pre-buying are key themes, but productivity, pricing, and innovation investments support a positive full-year outlook.
Fiscal Year 2025
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Solid Q4 and full-year 2025 results with adjusted EPS up 3% in Q4 and strong free cash flow. High-value categories drove growth, while apparel and general retail faced tariff headwinds. 2026 outlook expects modest organic growth, margin resilience, and continued focus on innovation and productivity.
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Adjusted EPS rose 2% year-over-year, with strong margins and robust free cash flow. High-value categories now comprise 45% of business, and a new Walmart RFID partnership is set to drive future growth. Q4 guidance anticipates continued sales and EPS gains.
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The business is driving growth through high-value categories, innovation in digital identification, and disciplined capital allocation. Recent acquisitions and expansion into new markets like food and logistics support resilience and margin improvement.
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Q2 delivered solid results with adjusted EPS of $2.42, strong free cash flow, and robust margins, despite apparel and trade policy headwinds. High-value categories and food/logistics outperformed, while apparel remained soft. Q3 EPS is expected to be flat year-over-year.
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Adjusted EPS rose 4% ex-currency in Q1, with strong growth in high value categories and margin expansion across both segments. Macro uncertainty from tariffs and trade policy is prompting a shift to quarterly guidance, but scenario planning and cost controls are in place. Q2 EPS is expected to rise sequentially, with apparel sales declining mid-single digits.
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Tariffs have limited direct impact due to local sourcing, while demand and inventory levels remain stable. RFID innovation and digital transformation are driving growth, with large opportunities in apparel, logistics, and food. Margin consistency and majority market share are maintained through productivity and innovation.
Fiscal Year 2024
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Delivered 5% sales growth and 19% adjusted EPS growth in 2024, with margin expansion and strong performance in high-value categories. 2025 guidance calls for 7–12% adjusted EPS growth, 3–4% organic sales growth, and continued investment in innovation and productivity.
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The session highlighted a focus on high-value segments, especially Intelligent Labels, with strong growth expected from new partnerships and expanding digital identification. Market conditions are stabilizing, and capital allocation remains disciplined, supporting both innovation and shareholder returns.
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Q3 adjusted EPS rose 9% to $2.33, prompting a raised full-year EPS outlook to $9.35–$9.50, nearly 20% growth. Both Materials and Solutions Groups delivered strong results, with Intelligent Labels up mid-teens YTD and a major Kroger RFID rollout announced.
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The company is targeting 5%+ annual sales growth and 17%+ EBITDA margins by 2028, driven by high-value categories and intelligent labels, with strong innovation in sustainability and digital identification. Intelligent Labels are expected to grow 15%+ annually, with adoption expanding beyond apparel into food and logistics.
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Q2 adjusted EPS rose 26% year-over-year to $2.42, prompting a raised full-year EPS outlook to $9.30–$9.50. Both Materials and Solutions Groups delivered strong volume and margin growth, with Intelligent Labels targeting over 20% volume growth for 2024.