Avery Dennison Reports Preliminary First Quarter 2026 Results

Avery Dennison Corporation (NYSE: AVY) reported preliminary, unaudited results for the first quarter ended March 31, 2026. The company said non-GAAP measures referenced in the release are reconciled from GAAP in attached financial schedules, with comparisons to the same period in the prior year unless otherwise indicated.

“We delivered strong first quarter results, with adjusted EPS of $2.47, once again reflecting the strength and resilience of our overall portfolio to deliver growth in a dynamic environment,” said Deon Stander, president and CEO.

Stander said the company is executing a strategy aimed at driving earnings growth, supported by innovation, commercial excellence, and service-led differentiation, alongside productivity, procurement, and cost management. He added that the company is working to offset inflationary pressures while maintaining supply continuity.

First Quarter 2026 Results by Segment

Materials Group

• Reported sales increased 11.4% to $1.6 billion; sales were up 3.6% excluding currency.
• Sales rose 1.9% on an organic basis, with mid-single digit volume/mix growth partially offset by deflation-related price reductions.
• Base categories increased in the mid-single digits, while high-value categories declined in the low-single digits.
• Graphics and Reflectives fell in the mid-single digits, and Performance Materials declined in the low-single digits.
• Reported operating margin was 14.9%.
• Adjusted operating margin (non-GAAP) was 15.4%, down 20 basis points.
• Adjusted EBITDA margin (non-GAAP) was 17.8%, up 10 basis points, as productivity and the net benefit of pricing and raw material costs—including raw material re-engineering—were partially offset by mix and higher employee-related costs.

Solutions Group

• Reported sales decreased 2.8% to $649 million; sales were down 0.9% excluding currency.
• Sales were down 0.9% on an organic basis.
• Sales in high-value categories increased in the low-single digits, including:
  • Embelex and Vestcom up in the mid-single digits
  • Intelligent Labels down in the low-single digits
• Sales in base categories declined in the mid-single digits, while overall apparel categories were comparable to the prior year.
• Reported operating margin was 7.5%.
• Adjusted operating margin (non-GAAP) was 9.0%, down 120 basis points.
• Adjusted EBITDA margin (non-GAAP) was 16.4%, down 80 basis points, as productivity and the net benefit of pricing and raw material costs were more than offset by higher employee-related costs and investments.

Capital Deployment and Balance Sheet

The company said it returned $133 million in cash to shareholders during the first quarter of 2026 through dividends and share repurchases. It repurchased 0.3 million shares for $61 million. Net of dilution from long-term incentive awards, the company’s share count at quarter-end was down 1.9 million versus the same time last year.

Avery Dennison reported that its balance sheet remains strong, with net debt to adjusted EBITDA (non-GAAP) of 2.4x at the end of the first quarter.

Taxes and Restructuring

The company reported an effective tax rate of 30.1% for the first quarter. The adjusted tax rate (non-GAAP) was 26.2%.

In the first quarter, Avery Dennison said it realized approximately $17 million in pre-tax savings from restructuring actions and incurred approximately $16 million in pre-tax restructuring charges.

Guidance for Second Quarter 2026

Based on factors listed in its supplemental presentation materials and other assumptions, the company expects second quarter 2026 reported earnings per share of $2.21 to $2.31.

Excluding an estimated impact of approximately $0.22 per share from other items and restructuring charges, the company expects second quarter 2026 adjusted earnings per share of $2.43 to $2.53.

About Avery Dennison

Avery Dennison is a global materials science and digital identification solutions company. The company said it provides labeling and RFID inlays and tags, software applications that connect physical and digital systems, and offerings that support branded packaging and display information to improve customer experience. It serves industries including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals, and automotive, and employs approximately 35,000 people in more than 50 countries. The company reported 2025 sales of $8.9 billion.