Avery Dennison Q3 earnings exceed expectations

Avery Dennison Corporation reported preliminary, unaudited results for its third quarter ended September 27, 2025, delivering earnings above expectations despite a continued dynamic environment. Reported EPS for the quarter was 2.13 dollars and adjusted EPS was 2.37 dollars, up 2 percent, while net sales of 2.2 billion dollars, increased by 1.5 percent.

Looking ahead, the company expects fourth-quarter 2025 reported earnings per share to be between 2.15 dollars and 2.25 dollars or 2.35 dollars to 2.45 dollars excluding restructuring charges and other items.

The company's president and CEO, Deon Stander, stated, "We delivered a solid third quarter, with earnings above expectations in a continued dynamic environment, reflecting the strength and durability of our overall portfolio,”. Stander emphasised the ongoing focus on core strategies, including driving growth in high-value categories, leveraging cost controls, and executing a disciplined capital allocation strategy.

The Materials Group reported sales of 1.5 billion dollars, a 1.2 percent increase, though organic sales were down 1.9 percent, as organic volume growth was offset by deflation-related price reductions. The segment's adjusted operating margin improved by 40 basis points to 15.2 percent, and its adjusted EBITDA margin grew by 50 basis points to 17.5 percent, primarily driven by productivity benefits.

The Solutions Group saw reported sales increase by 2 percent to 700 million dollars, with organic sales up 3.6 percent. High-value categories, including Intelligent Labels, were up high single digits, with both Vestcom and Embelex growing by more than 10 percent. However, the Solutions Group's adjusted EBITDA margin was down 90 basis points to 17 percent, as benefits from productivity and higher volume were offset by higher employee-related costs.

The company has maintained a strong balance sheet, with a net debt to adjusted EBITDA of 2.2x. Through the first three quarters of 2025, the company returned 670 million dollars in cash to shareholders via share repurchases (454 million dollars) and dividends.

In October, Avery Dennison completed the acquisition of the U.S.-based flooring adhesives business of Meridian Adhesives Group for 390 million dollars.