Avery Dennison Q2 earnings up, sales slightly decline

Avery Dennison Corporation, a global materials science and digital identification solutions company, announced its preliminary, unaudited financial results for the second quarter ended June 28, 2025. The company's reported earnings per share (EPS) reached 2.41 dollars, while adjusted EPS of 2.42 dollars, increased 5 percent. Net sales for the quarter of 2.2 billion dollars, declined 0.7 percent, while organic sales were down 1 percent.

Looking ahead, Avery Dennison has provided guidance for the third quarter of 2025. The company expects reported earnings per share to be in the range of 2.14 dollars to 2.30 dollars. Excluding an estimated 10 cents per share impact from restructuring charges and other items, the adjusted earnings per share for the third quarter are projected to be between 2.24 dollars and 2.40 dollars.

Deon Stander, president and CEO, noted that while shifts in trade policy led to reduced sourcing demand for apparel and general retail categories during the quarter, growth in high-value categories and productivity within the base business effectively mitigated the impact of tariffs. “We delivered a solid second quarter, with earnings above expectations in a dynamic environment, reflecting the strength of our overall portfolio,” Stander said.

In the Materials Group, reported sales saw a slight increase of 0.2 percent to 1.6 billion dollars, though organic sales were down 1 percent. High-value categories, including Intelligent Labels, experienced low single-digit growth overall, while base categories saw low single-digit declines. Label Materials were down low single digits, but Graphics and Reflectives were up high single digits, and Performance Tapes and Medical segments showed low single-digit growth. The reported operating margin for this segment was 16.1 percent, with an adjusted operating margin of 15.6 percent, down 20 basis points. Adjusted EBITDA margin was 17.8 percent, down 10 basis points.

The Solutions Group reported a 2.6 percent decrease in sales to 670 million dollars, with organic sales down 0.8 percent. Sales in high-value categories, including Intelligent Labels, saw low single-digit growth, and when excluding the estimated indirect impact of tariffs, these categories were up high single digits. Intelligent Labels remained comparable to the prior year, Vestcom grew approximately 10 percent, while Embelex was down high single digits. Sales in base categories declined mid-single digits, and overall apparel categories also saw a mid-single-digit decrease. The reported operating margin for this segment was 8.9 percent, with an adjusted operating margin of 10 percent, down 10 basis points. Adjusted EBITDA margin improved by 30 basis points to 17.1 percent.