Chairman of the Board and Chief Executive Officer at Avery Dennison
Thanks, John. Good day, everyone. We delivered another record in the second quarter with EPS of $2.64, well above our expectations, and are raising our full year guidance. We now expect earnings of $9.70 to $10 per share for the year, more than 10% above last year and 50% above pre-pandemic levels in 2019.
Our ability to consistently deliver impressive financial results rests both on the team's adaptability to execute amidst compounding crises and the strategic foundations we've laid to drive outsized growth in high-value categories, grow profitably in our base businesses, focus relentlessly on productivity, effectively allocate capital and lead in an environmentally and socially responsible manner.
A key element of our strategy to drive outsized growth in high-value categories has been our focus on Intelligent Labels. We've invested heavily in this platform and the team, seeding new markets, adding new technological capabilities and expanding capacity. Our strategies continue to pay off and are now accelerating.
Looking ahead, we are increasing our growth outlook for this platform to more than 20% through the strategic horizon. This is a tremendous example of our strategies at work. We have refined our strategies over time, raising the bar for ourselves in the process to ensure we continue to deliver superior value creation for all of our stakeholders.
Now a quick update on the quarter by business. Label and Graphic Materials posted strong top line growth for the quarter driven by higher pricing. Volumes were down due to supply chain constraints, the lockdowns in China and the impact of exiting Russia that we discussed last quarter.
Raw material availability hampered our ability to meet demand. Paper in particular was tight and only began to ease at the end of the quarter, and we anticipate further improvements as we move through Q3. The team is doing a tremendous job leveraging our innovation capabilities to offset a good portion of these constraints. And as discussed last quarter, lockdowns in the Greater Shanghai area impacted our materials business' ability to produce for much of April. And while restrictions eased as anticipated, they have had an impact on output as well as end demand in China.
Overall, volumes remained strong across LGM, up 4% annually versus 2019. While this is slightly lower than our pace from a quarter ago for the reasons discussed, we anticipate a bounce back as we move into the second half. LGM's margin was strong in the quarter, expanding versus prior year and sequentially. We have further accelerated pricing actions, reducing the time lag between when we experience inflation and implement pricing. We anticipate further inflation as we move into Q3 on paper inputs and energy costs in particular and are continuing to raise prices accordingly.
Retail Branding and Information Solutions delivered another strong quarter with significant margin expansion and revenue growth. Strong revenue growth in high-value categories, Intelligent Labels, external embellishments and the Vestcom acquisition, was partially offset by a decline in the base apparel business. Following a robust Q4 and Q1, base apparel volumes were down low single digits in Q2 as some brands and retailers were bringing down inventories that were built up previously. Our outlook assumes further inventory reductions through the balance of the year. We are well positioned to continue to gain share while driving profitable growth in the base.
As I mentioned previously, Intelligent Labels momentum is accelerating. We have a stated target of 15% to 20% annual growth in this business over the strategic horizon. And as you know, we have been delivering at the high end of that target. The growth has largely been driven by apparel. And while we continue to see significant opportunity there, long term, we see even greater opportunity outside of apparel.
As the global leader in RFID, we have been strategically investing to not only capture these new opportunities but create them. And as I said earlier, we are increasing our growth outlook for this business and now anticipate more than 20% growth in the coming years. As for the bottom line, RBIS continues to deliver strong EBITDA margins, up more than two points compared to prior year as we continue to shift this business towards higher-value solutions. As for Industrial and Healthcare Materials, the segment delivered solid sales growth in the quarter and improved margins roughly two points sequentially as we accelerated pricing actions to cover inflation.
Across the company, I'm pleased with the continued progress we are making towards the success of all of our stakeholders. Our consistent performance reflects the strength of our markets, our industry-leading positions, the strategic foundations we've laid and our agile and talented team. We remain confident that the strategies we formulate will continue to enable us to generate superior value creation through a balance of GDP plus growth and top-quartile returns over the long run.
And once again, I want to thank our entire team for their tireless efforts to keep one another safe while continuing to deliver for our customers during this challenging period. The team continues to raise their game each quarter to address the unique challenges at hand.
Thank you. Over to you, Greg.