Core Insights - Avery Dennison Corporation (AVY) reported adjusted earnings of $2.45 per share for Q4 2025, surpassing the Zacks Consensus Estimate of $2.40, with a year-over-year increase of 2.9% [1][9] - Total revenues for the quarter rose 3.9% year over year to $2.27 billion, although this fell short of the Zacks Consensus Estimate of $2.29 billion [2][9] - The company’s gross margin improved to 28.7%, up from 27.9% in the prior year, driven by a 6.8% increase in gross profit to $651 million [2][9] Financial Performance - Marketing, general and administrative expenses increased to $369 million from $329 million year over year [3] - Adjusted operating profit was $281.5 million, slightly up from $280 million in the previous year, resulting in an adjusted operating margin of 12.4%, down from 12.8% [3] - For the full year 2025, adjusted EPS increased 1.1% to $9.53, exceeding the Zacks Consensus Estimate of $9.50, while total revenues improved 1.1% to $8.86 billion, missing the estimate of $8.88 billion [10] Segment Performance - Revenues in the Materials Group segment rose 5.1% year over year to $1.55 billion, aligning with estimates, but organic sales dipped 0.9% [4] - The Solutions Group saw revenues increase by 1.5% year over year to $724 million, with organic sales improving by 1.3% [5] Cash and Debt Position - The company returned $861 million to shareholders through share repurchases and dividends in 2025, repurchasing 3.2 million shares [6][9] - Cash and cash equivalents at the end of 2025 were $203 million, down from $329 million at the end of 2024, while long-term debt rose to $3.21 billion from $2.56 billion [6] Restructuring Efforts - Avery Dennison achieved approximately $60 million in pre-tax savings from restructuring efforts in 2025, incurring pre-tax restructuring charges of around $47 million [7] Future Guidance - The company anticipates adjusted EPS in the range of $2.40 to $2.46 for Q1 2026 [11] Stock Performance - AVY shares have increased by 4.5% over the past year, contrasting with a 5.3% decline in the industry [12]

Fourth Quarter and Full Year 2025 Financial Review and Analysis (preliminary, unaudited) February 4, 2026 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year. Safe Harbor Statement Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other busine ...

Core Insights - Avery Dennison reported revenue of $2.27 billion for Q4 2025, a year-over-year increase of 3.9% and an EPS of $2.45, up from $2.38 a year ago [1] - The revenue was slightly below the Zacks Consensus Estimate of $2.29 billion, resulting in a surprise of -0.94%, while the EPS exceeded the consensus estimate of $2.40 by +2.08% [1] Financial Performance Metrics - Net Sales for the Solutions Group were $724.2 million, compared to an estimated $753.41 million, reflecting a year-over-year increase of +1.5% [4] - Net Sales for the Materials Group were $1.55 billion, matching the analyst estimate and showing a +5.1% increase from the previous year [4] - Adjusted Operating income for the Corporate expense was reported at -$19.2 million, better than the estimated -$20.9 million [4] - Adjusted Operating income for the Solutions Group was $81.4 million, exceeding the average estimate of $76.24 million [4] - Adjusted Operating income for the Materials Group was $219.3 million, below the estimated $234.09 million [4] Stock Performance - Avery Dennison's shares have returned +2.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a +0.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - FY25 reported EPS was $8.79, with adjusted EPS of $9.53, reflecting a 1% increase year-over-year[4] - FY25 net sales reached $8.9 billion, also up 1% compared to the previous year[4] - 4Q25 reported EPS was $2.15, while adjusted EPS increased by 3% to $2.45[4] - 4Q25 net sales totaled $2.3 billion, marking a 4% increase year-over-year[4] - Total net sales for 2025 reached $8,855.5 million, a 1.1% increase compared to 2024's $8,755.7 million[28] - Total net sales for the three months ended December 31, 2025, were $2,271.2 million, an increase from $2,185.7 million for the same period in 2024, representing a growth of 3.9%[50] Cash Flow and Shareholder Returns - The company generated over $700 million in adjusted free cash flow during FY25[3] - The company returned $861 million to shareholders in FY25 through dividends and share repurchases[11] - The company reported adjusted free cash flow of $707.1 million, up from $699.5 million in the previous year[28] - Adjusted free cash flow for the three months ended December 31, 2025, was $302.6 million, compared to $279.5 million for the same period in 2024, reflecting an increase of 8.2%[48] Profitability Metrics - Adjusted operating income for 2025 was $1,123.8 million, a slight increase of 0.2% from $1,122.1 million in 2024, with margins at 12.7%[28] - Adjusted EBITDA for the year was $1,452.0 million, up 1.2% from $1,434.3 million, maintaining a margin of 16.4%[28] - Adjusted operating income for the three months ended December 31, 2025, was $281.5 million, compared to $279.9 million for the same period in 2024, reflecting a slight increase[45] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $1,452.0 million, up from $1,434.3 million for the twelve months ended December 28, 2024, indicating a growth of 1.2%[45] Income and Margins - Reported net income for 2025 was $688.0 million, down 2.4% from $704.9 million in 2024, with adjusted net income at $746.3 million, a decrease of 1.9%[28] - Adjusted net income for the three months ended December 31, 2025, was $189.4 million, compared to $191.4 million for the same period in 2024, showing a decrease of 1.0%[47] - Adjusted net income per common share for the three months ended December 31, 2025, was $2.45, an increase from $2.38 for the same period in 2024, representing a growth of 2.9%[47] Debt and Leverage - The net debt to adjusted EBITDA ratio was 2.4x at the end of 4Q25, indicating a strong balance sheet[12] - Long-term debt rose to $3,210.0 million from $2,559.9 million, indicating increased leverage[32] - The company's total debt stood at $3,732.9 million, with net debt calculated at $3,530.1 million after accounting for cash and cash equivalents of $202.8 million[54] - The net debt to adjusted EBITDA ratio for the last twelve months (LTM) was 2.4[54] Operational Efficiency - Cost reduction actions in 2025 resulted in over $60 million in pre-tax savings[14] - High-value categories now account for approximately 45% of total revenue, driving outsized growth[5] Group Performance - The Materials Group reported net sales of $6,093.3 million, reflecting a 1.3% increase, while the Solutions Group saw a 0.7% increase to $2,762.2 million[28] - The Materials Group reported net sales of $1,547.0 million for the three months ended December 31, 2025, an increase from $1,472.0 million for the same period in 2024, reflecting a growth of 5.1%[50] - Adjusted operating income for the Materials Group was $219.3 million for the three months ended December 31, 2025, compared to $217.5 million for the same period in 2024[52] - Adjusted EBITDA for the Solutions Group was $128.8 million for the three months ended December 31, 2025, reflecting an increase from $127.2 million in the prior year[52] Tax and Currency Impact - The adjusted tax rate for the three months ended December 31, 2025, was 23.6%, compared to 25.7% for the same period in 2024, indicating a decrease in the effective tax burden[47] - The company experienced a foreign currency translation impact of (1.7)% on reported net sales for the three months ended December 31, 2025[56]

Core Insights - Avery Dennison Corporation reported solid full-year results for 2025, with an adjusted EPS of $9.53, indicating the durability of its business model [1] Financial Performance - The company announced preliminary, unaudited results for its fourth quarter and full year ended December 31, 2025 [1] - Non-GAAP financial measures referenced in the release are reconciled from GAAP in the attached financial schedules [1]

Core Thesis - Avery Dennison Corporation (AVY) is positioned as a strong investment opportunity due to its robust financial performance, innovative product offerings, and consistent dividend growth [1][4][8]. Financial Performance - As of Q3 2025, Avery Dennison reported sales of $2.22 billion, reflecting a year-over-year increase of 1.5% [4]. - The company achieved an adjusted EPS of $2.37 and a 17.5% adjusted EBITDA margin, driven by productivity improvements [4]. - The financial score of 96/99 indicates exceptional financial strength [4]. - Free cash flow for the quarter was nearly $270 million, supporting both dividends and reinvestment [6]. Dividend Growth - The annual dividend is currently $3.76, yielding 2.15%, with a 15-year streak of increases and a five-year growth rate of 53% [4][6]. - The company's disciplined capital allocation and consistent pricing power underpin its ability to maintain and grow dividends [4]. Product and Market Position - Avery Dennison operates in materials science and digital identification solutions, playing a crucial role in global supply chains [3]. - The company’s products are integral to various sectors, including food, logistics, apparel, and e-commerce [3]. - Intelligent labels are a key growth area, expected to grow over 15% in 2025 due to increased adoption in e-commerce and anti-counterfeiting [5]. Strategic Initiatives - The company is investing in circular packaging and sustainability-driven materials to align with evolving environmental standards [5]. - Restructuring initiatives are aimed at freeing up capital for further investment in next-generation technologies [5]. Market Outlook - Q4 guidance suggests continued operational stability with an expected EPS of $2.35–$2.45 [6]. - The combination of dependable income and structural growth positions Avery Dennison for long-term expansion [6].

Core Insights - Avery Dennison Corporation (AVY) is set to report its fourth-quarter 2025 results on February 4, 2026, with expected revenues of $2.29 billion, reflecting a 4.9% increase year-over-year [1] - The earnings consensus estimate for AVY is $2.40 per share, indicating a slight year-over-year rise of 0.8% [1] Revenue and Earnings Estimates - The Zacks Consensus Estimate for AVY's fourth-quarter revenues is $2.29 billion, which represents a 4.9% increase from the previous year [1] - The Materials Group segment is projected to see a revenue increase of 5.2% to $1.55 billion, driven by growth in base business and specialty labels [4][7] - The Solutions Group segment's revenues are expected to reach $746 million, marking a 4.5% increase year-over-year [8] Earnings Performance History - Avery Dennison has beaten the Zacks Consensus Estimates in three of the last four quarters, with an average surprise of 0.9% [2] Cost Factors and Margin Impact - Higher raw material, labor, and freight costs are anticipated to negatively impact the company's margins, although productivity improvements and cost-saving measures may offset some of these effects [6] Stock Performance - AVY shares have increased by 3.3% over the past year, contrasting with a 4.8% decline in the industry [9]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Avery Dennison (AVY) due to higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Avery Dennison is expected to report quarterly earnings of $2.40 per share, reflecting a year-over-year increase of +0.8% [3]. - Revenues are projected to be $2.29 billion, which is a 4.9% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.16% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Avery Dennison is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.46% [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation from the consensus estimate, with positive readings being more predictive of earnings beats [9][10]. - Avery Dennison's current Zacks Rank is 3, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Avery Dennison exceeded the expected earnings of $2.32 per share by delivering $2.37, resulting in a surprise of +2.16% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Conclusion - Despite the potential for an earnings beat, various factors can influence stock movement, making it essential to consider other elements beyond just earnings results [15][17].

Core Viewpoint - Avery Dennison Corporation will host its fourth quarter and full year 2025 earnings conference call on February 4, 2026, at 11:00 a.m. ET, with the earnings release scheduled for approximately 6:45 a.m. ET on the same day [1] Group 1 - The earnings conference call will be webcast live, and a replay will be available on the company's website [1]

Core Insights - Food waste is a significant and hidden challenge in the global retail supply chain, with economic costs projected to reach $540 billion by 2026, up from $526 billion last year [2][7] - On average, food waste accounts for 33% of total revenues in the food retail supply chain annually [3] - A report by Avery Dennison highlights that 61% of businesses lack full visibility into food waste across their operations, indicating a need for innovation and collaboration [4] Economic Impact - The cumulative cost of food waste from 2025 to 2030 is expected to reach $3.4 trillion, coinciding with the UN's Sustainable Development Goal 12.3 to halve global food waste by 2030 [7] - Meat waste is projected to result in $94 billion in lost output across the global supply chain in 2026, with fresh produce following closely at $88 billion [10] Industry Challenges - 67% of businesses predict that meat waste during the holiday season will noticeably reduce their margins, with 69% stating that managing this issue has become a bigger operational concern [11] - Economic volatility and shifting consumer demands are exacerbating food waste issues, with 74% of retailers admitting inflation complicates demand prediction for fresh meat [12][13] Opportunities for Growth - Over 73% of business leaders view tackling food waste as a growth opportunity, emphasizing the need to address the $540 billion in lost value [14] - The report calls for uncovering blind spots in the supply chain to reduce loss, build resilience, and create lasting value for businesses and the planet [14]