Avery Dennison (NYSE:AVY) Posts Quarterly Earnings Results

Key Points

• Q1 beat: Avery Dennison reported adjusted EPS of $2.47 (vs. $2.41 est.) on $2.30B revenue (+7% YoY), with $104M of adjusted free cash flow and $133M returned to shareholders via dividends and buybacks.
• Q2 outlook & margin pressure: Management guided to $2.43–$2.53 EPS with organic sales of 0–2% but warned of raw‑material headwinds—expecting high single‑digit sequential inflation and implementing price increases, material reengineering and >$55M of restructuring savings to protect margins.
• Operational/strategic highlights: The Materials Group outperformed (sales +11%, adjusted EBITDA ~+12%) while Intelligent Labels was mixed, and Avery Dennison announced a strategic $75M investment in Wiliot to expand its Physical AI/IoT capabilities.

Avery Dennison (NYSE:AVY - Get Free Report) issued its quarterly earnings data on Tuesday. The industrial products company reported $2.47 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.41 by $0.06, FiscalAI reports. Avery Dennison had a return on equity of 33.84% and a net margin of 7.77%.The business had revenue of $2.30 billion during the quarter, compared to analyst estimates of $2.26 billion. During the same period in the prior year, the company posted $2.30 EPS. The business's revenue for the quarter was up 7.0% compared to the same quarter last year. Avery Dennison updated its Q2 2026 guidance to 2.430-2.53 EPS.

Here are the key takeaways from Avery Dennison's conference call:

• Company reported a strong Q1: adjusted EPS rose 7% to $2.47, adjusted free cash flow was $104M, and $133M was returned to shareholders via dividends and buybacks.
• Materials Group outperformed, with reported sales up 11% (organic ~2%), base categories growing mid-single-digits, and adjusted EBITDA up ~12% (margins +10 bps), which offset weaker Solutions results.
• Raw-material dynamics shifted to inflation in March; management expects high single-digit sequential inflation in Q2 and is implementing price increases and material reengineering to try to offset the margin pressure.
• Intelligent Labels was mixed (logistics down low-double-digits, apparel/retail up low-single-digits); company expects IL growth to be H2-weighted and deepened its strategic position with a $75M investment in Wiliot.
• Q2 guidance shows organic sales of 0–2% and EPS $2.43–$2.53 (≈3% growth at midpoint); management expects >$55M in restructuring savings, ~100% adjusted free cash flow conversion for the year, and disciplined capital allocation (CapEx ≈ $260M, net debt/EBITDA ~2.4x).

Avery Dennison Stock Performance

NYSE:AVY opened at $166.61 on Wednesday. The company has a 50-day moving average of $175.49 and a 200-day moving average of $178.12. The firm has a market cap of $12.81 billion, a price-to-earnings ratio of 18.98, a price-to-earnings-growth ratio of 2.73 and a beta of 1.00. The company has a current ratio of 1.13, a quick ratio of 0.76 and a debt-to-equity ratio of 1.43. Avery Dennison has a twelve month low of $156.23 and a twelve month high of $199.54.

Avery Dennison Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, March 18th. Shareholders of record on Wednesday, March 4th were issued a $0.94 dividend. This represents a $3.76 dividend on an annualized basis and a yield of 2.3%. The ex-dividend date of this dividend was Wednesday, March 4th. Avery Dennison's dividend payout ratio is presently 42.82%.

Insider Buying and Selling

In related news, SVP Ignacio J. Walker sold 1,156 shares of the stock in a transaction that occurred on Friday, February 6th. The shares were sold at an average price of $192.95, for a total transaction of $223,050.20. Following the completion of the sale, the senior vice president directly owned 7,588 shares of the company's stock, valued at $1,464,104.60. This represents a 13.22% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Mitchell R. Butier sold 13,000 shares of the firm's stock in a transaction that occurred on Thursday, March 12th. The stock was sold at an average price of $171.50, for a total transaction of $2,229,500.00. Following the sale, the director owned 198,147 shares of the company's stock, valued at $33,982,210.50. The trade was a 6.16% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 34,156 shares of company stock worth $5,930,150 over the last quarter. Insiders own 0.81% of the company's stock.

Hedge Funds Weigh In On Avery Dennison

Hedge funds have recently modified their holdings of the stock. Morgan Stanley lifted its holdings in shares of Avery Dennison by 20.1% during the fourth quarter. Morgan Stanley now owns 3,869,889 shares of the industrial products company's stock valued at $703,856,000 after purchasing an additional 647,795 shares during the last quarter. Wellington Management Group LLP raised its holdings in Avery Dennison by 12.5% during the 3rd quarter. Wellington Management Group LLP now owns 5,808,960 shares of the industrial products company's stock worth $942,039,000 after buying an additional 644,664 shares during the period. Balyasny Asset Management L.P. purchased a new stake in Avery Dennison during the third quarter valued at about $74,942,000. Deutsche Bank AG lifted its stake in Avery Dennison by 108.2% during the fourth quarter. Deutsche Bank AG now owns 754,783 shares of the industrial products company's stock valued at $137,280,000 after buying an additional 392,283 shares in the last quarter. Finally, AQR Capital Management LLC boosted its holdings in shares of Avery Dennison by 159.2% in the fourth quarter. AQR Capital Management LLC now owns 542,152 shares of the industrial products company's stock worth $98,607,000 after buying an additional 333,013 shares during the period. 94.17% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several research analysts have recently issued reports on the company. UBS Group decreased their price target on Avery Dennison from $226.00 to $222.00 and set a "buy" rating for the company in a research note on Friday, April 10th. BMO Capital Markets lifted their price objective on shares of Avery Dennison from $215.00 to $224.00 and gave the company an "outperform" rating in a research note on Friday, February 6th. JPMorgan Chase & Co. increased their target price on shares of Avery Dennison from $195.00 to $205.00 and gave the company an "overweight" rating in a research report on Monday, February 9th. Raymond James Financial set a $192.00 target price on shares of Avery Dennison in a research note on Tuesday, April 21st. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of Avery Dennison in a research note on Friday, March 27th. Eight investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to data from MarketBeat.com, Avery Dennison currently has a consensus rating of "Moderate Buy" and a consensus target price of $207.11.

Key Headlines Impacting Avery Dennison

Here are the key news stories impacting Avery Dennison this week:

• Positive Sentiment: Q1 results beat consensus: reported $2.47 EPS on $2.30B revenue (revenue +7% YoY), outpacing analyst estimates and showing improved margins and a swing to positive cash flow — supports near‑term earnings durability. Avery Dennison Announces First Quarter 2026 Results
• Positive Sentiment: Operational drivers: management cited volume gains and disciplined cost control as reasons for the outperformance, and several analyst writeups highlight better profitability metrics (ROE, net margin) versus prior year. Avery Dennison Q1 Earnings Top Estimates on Volume Gains, Cost Control
• Positive Sentiment: Strategic tech investment: AVY announced a $75M strategic investment in Wiliot to expand its sensor/Physical AI capabilities — a long‑term growth and differentiation move for digital identification solutions. Avery Dennison Announces Strategic $75 Million Investment in Wiliot to Scale Physical AI
• Neutral Sentiment: Earnings call and transcript provide color: management balanced upbeat execution details with caution on pockets of softness; investors should review the full call for segment‑level outlook and working capital commentary. Avery Dennison (AVY) Q1 2026 Earnings Transcript
• Neutral Sentiment: Analyst/valuation discussion: coverage notes multi‑year share weakness and analysts are reworking valuation assumptions; this frames upside potential but also keeps expectations in flux. How The Avery Dennison (AVY) Story Is Shifting As Analysts Rework Valuation Expectations
• Negative Sentiment: Q2 guidance slightly light: management set Q2 EPS guidance of $2.430–$2.53 versus a consensus near $2.53, and Reuters highlighted that the forecast was below some estimates — this trimmed near‑term upside and prompted caution. Labeling firm Avery Dennison forecasts second-quarter profit below estimates
• Negative Sentiment: Mixed segment performance: some business units showed softness despite overall growth — a reminder that revenue/margin drivers are uneven across end markets and may pressure near‑term revisions. Avery Dennison Earnings Call Balances Strength and Strain

Avery Dennison Company Profile

Avery Dennison NYSE: AVY is a global materials science and manufacturing company specializing in labeling and packaging solutions. The company develops pressure-sensitive materials, tags and labels, and adhesive technologies that help brands and businesses enhance product identification, branding and supply-chain performance. Avery Dennison's offerings range from industrial and retail labeling to high-performance tapes, films and graphics materials used across multiple end markets.

The company operates through several key segments, including Label and Graphic Materials, which supplies pressure-sensitive materials for consumer goods; Retail Branding and Information Solutions, offering apparel tags, RFID inlays and digital product identification; Pressure-Sensitive Materials, providing specialty tapes and adhesives; and RF Technologies, focused on advanced RFID and IoT labeling solutions.