Avery Dennison announces second quarter 2025 results

                                 Highlights:

• 2Q25 Reported EPS of $2.41

  • Adjusted EPS (non-GAAP) of $2.42, up 5% sequentially and comparable to prior year

• 2Q25 Net sales of $2.2 billion, down 0.7%

  • Organic sales change (non-GAAP) down 1.0%

• 3Q25 Reported EPS guidance of $2.14 to $2.30

  • 3Q25 Adjusted EPS guidance of $2.24 to $2.40

Avery Dennison Corporation (NYSE: AVY) today announced preliminary, unaudited results for its second quarter ended June 28, 2025. Non-GAAP financial measures referenced in this release are reconciled from GAAP in the attached financial schedules. Unless otherwise indicated, comparisons are to the same period in the prior year.

“We delivered a solid second quarter, with earnings above expectations in a dynamic environment, reflecting the strength of our overall portfolio,” said Deon Stander, president and CEO.

“While trade policy changes led to lower sourcing demand for apparel and general retail categories in the quarter, growth in our high-value categories and productivity in the base business offset the impact from tariffs.

“The broader impact of trade policy changes is unclear. We are prepared for various scenarios and will continue to leverage our proven playbook to safeguard earnings, while driving key initiatives to deliver strong profitable growth over the cycle,” added Stander.

“Once again, I extend my gratitude to our agile, engaged, and talented team for their unwavering focus on excellence and dedication to addressing the current challenges at hand.”

Second Quarter 2025 Results by Segment

Materials Group

• Reported sales increased 0.2% to $1.6 billion.

• Sales down 1.0% on organic basis

  • High-value categories, including Intelligent Labels, up low single digits in total; base categories down low single digits

  • Label Materials down low single digits

  • Graphics and Reflectives up high single digits; Performance Tapes and Medical up low single digits

• Reported operating margin of 16.1%

  • Adjusted operating margin (non-GAAP) of 15.6%, down 20 basis points

  • Adjusted EBITDA margin (non-GAAP) of 17.8%, down 10 basis points, as the benefits from productivity and higher volume/mix were offset by the net impact of pricing and raw material inputs costs.

Solutions Group

• Reported sales decreased 2.6% to $670 million.

• Sales down 0.8% on organic basis

  • Sales in high-value categories, including Intelligent Labels, up low single digits

    • High-value categories, excluding the estimated indirect impact of tariffs, up high single digits

    • Intelligent Labels comparable to prior year; Vestcom up approximately 10%; Embelex down high single digits

  • Sales in base categories down mid-single digits

  • Overall apparel categories down mid-single digits

• Reported operating margin of 8.9%

  • Adjusted operating margin of 10.0%, down 10 basis points

  • Adjusted EBITDA margin of 17.1%, up 30 basis points, as benefits from productivity were partially offset by lower volume in apparel and growth investments.

Other

Balance Sheet and Capital Deployment

During the first half of 2025, the company returned $503 million in cash to shareholders through a combination of share repurchases and dividends. The company repurchased 2.0 million shares at an aggregate cost of $360 million in the first half of the year. Net of dilution from long-term incentive awards, the company’s share count was down 2.8 million compared to the same time last year. In the second quarter, the company increased its quarterly dividend to $0.94 per share, representing an increase of approximately 7% over the previous dividend rate. 

The company continues to deploy capital in a disciplined manner, executing its long-term capital allocation strategy. The company’s balance sheet remains strong. Net debt to adjusted EBITDA (non-GAAP) was 2.3x at the end of the second quarter.

Income Taxes

The company’s reported effective tax rate was 26.0% for the second quarter. The adjusted tax rate (non-GAAP) for the quarter was also 26.0%.

Cost Reduction Actions

In the first half of the year, the company realized approximately $30 million in pre-tax savings from restructuring, net of transition costs, and incurred approximately $13 million in pre-tax restructuring charges.

Guidance

In its supplemental presentation materials, “Second Quarter 2025 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its financial results. Based on the factors listed and other assumptions, the company expects third quarter 2025 reported earnings per share of $2.14 to $2.30.

Excluding an estimated ~$0.10 per share impact of restructuring charges and other items, the company expects third quarter 2025 adjusted earnings per share of $2.24 to $2.40.

For further details visit www.investors.averydennison.com.