Avery Dennison Corporation (AVY) Earnings
Avery Dennison Corporation is expected to report next earnings on October 28, 2026 (in NaN days), with a consensus EPS estimate of $2.31. AVY has beaten EPS estimates in 6 of its last 12 reported quarters (average surprise +5.8% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jul 30, 2026 | $2.47 | $2.89 | +17.0% | $2.5B | +7.3% |
| Apr 28, 2026 | $2.41 | $2.47 | +2.5% | $2.3B | +1.7% |
| Feb 4, 2026 | $2.40 | $2.45 | +2.1% | $2.3B | +1.1% |
| Oct 22, 2025 | $2.33 | $2.37 | +1.7% | $2.2B | -0.1% |
| Jul 22, 2025 | $2.39 | $2.42 | +1.3% | $2.2B | -1.0% |
| Apr 23, 2025 | $2.32 | $2.30 | -0.9% | $2.1B | -0.1% |
| Jan 30, 2025 | $2.39 | $2.38 | -0.4% | $2.2B | -0.1% |
| Oct 23, 2024 | $2.33 | $2.33 | +0.0% | $2.2B | -0.8% |
| Jul 23, 2024 | $2.26 | $2.42 | +7.1% | $2.2B | +2.4% |
| Jan 31, 2024 | $2.15 | $2.16 | +0.5% | $2.1B | +0.8% |
| Oct 25, 2023 | $2.10 | $2.10 | +0.0% | $2.1B | -3.4% |
| Jul 25, 2023 | $2.01 | $1.92 | -4.5% | $2.1B | -3.1% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · July 30, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
- Overall Q2 2026 Financial Performance * Delivered 8% year-over-year organic sales growth, 19% adjusted EPS growth, 50 basis point expansion in adjusted EBITDA margin to 17.1%, and $365 million in adjusted free cash flow. * Half of Q2 organic growth came from customer pre-buy activity, driven by raw material inflation and supply security concerns, concentrated in Europe and Asia. * Net debt-to-adjusted EBITDA ratio stood at 2.3x at quarter-end, reflecting a strong balance sheet. * Returned $210 million to shareholders in Q2 via $76 million in dividends and $138 million in accelerated share repurchases, bringing year-to-date shareholder returns to ~$350 million. - Strategic Priorities * Invest in innovation and service-led differentiation to drive share gains and expand new business opportunities. * Execute commercial and operational agility, including productivity and targeted pricing actions, to mitigate inflationary pressures. * Generate strong free cash flow, maintain a healthy balance sheet, and pursue disciplined capital allocation. - Cross-Enterprise Intelligent Labels Platform Performance * Overall logistics vertical sales were down double digits year-over-year, due to lapping outsized 2025 share gains with a top partner and softer overall customer demand; the company continues to expand pilots with new logistics customers. * Apparel and general retail saw strong growth from new program rollouts, with no impact from customer inventory pre-buy activity. * Food positioning is on track for back-half 2026 growth, with the start of a full rollout with the largest U.S. grocer and expanding activity with other customers.
Guidance
- Full-year 2026 guidance is reinstated, expecting organic sales growth of 3% to 4% (total reported sales growth of 5% to 6%, including 1.5% from currency translation and 1% from the Taylor Adhesives acquisition, offset by a 0.5% headwind from a fiscal calendar change). - Full-year 2026 adjusted EPS is guided to $10 to $10.30, representing 7% year-over-year growth at the midpoint. Growth is driven by organic volume/mix gains, over $60 million in productivity/restructuring benefits, and a net ~$0.30 benefit from currency, share count, interest, and tax, offset by wage inflation and the normalization of 2025 below-target incentive compensation. - Management expects the majority of the Q1-Q2 customer inventory pre-builts to unwind in Q3 2026, with a smaller portion carrying over into Q4. This unwind will create a $0.50 sequential EPS headwind in Q3 compared to the $0.25 EPS tailwind from pre-builts in Q2. - Full-year 2026 free cash flow conversion is targeted at ~100%, with fixed and IT capital spending expected to be approximately $260 million. - Management expects the enterprise-wide intelligent labels platform to deliver full-year 2026 growth that outpaces 2025 growth.
Segment performance
1. Materials Group: - Organic sales growth of 10% year-over-year, with high single-digit volume/mix growth and low single-digit pricing. Excluding customer pre-buy tailwinds, underlying organic growth was mid-single digits. - Regional volume/mix growth: mid-single digits in North America, mid-teens in Europe, high single digits in both Asia and Latin America. - High-value categories grew mid-single digits overall: specialty and durable labels grew low double digits, intelligent labels grew high single digits, industrial tapes grew low single digits, and graphics and reflective sales were flat year-over-year. - Adjusted EBITDA grew 17% year-over-year, with adjusted EBITDA margin expanding 20 basis points to (overall company adjusted EBITDA margin was 17.1% for the quarter). - Revenue contribution: Accounts for the majority of the company's organic growth, driving ~80% of the total 8% company-wide organic growth in Q2 2026. 2. Solutions Group: - Organic sales grew 3% year-over-year, with both high-value and base categories delivering low single-digit growth. - High-value category performance: Embellix delivered low double-digit growth (driven by core market expansion and 2026 FIFA World Cup demand), intelligent labels grew low single digits (with strength in apparel and general retail), and Vescon was down low single digits due to lapping large 2025 customer rollouts. Base solutions returned to low single-digit growth. - Adjusted EBITDA margin expanded 150 basis points year-over-year to 18.6%, driven by productivity initiatives, reversal of prior-year tariff inefficiencies, and positive net price-cost impact.
Risks & headwinds
- Continued geopolitical uncertainty makes the timing and magnitude of customer inventory destocking hard to predict, which could create deviations from expected Q3 and full-year earnings results. - Raw material inflation came in slightly above expectations in Q2 2026, with high single-digit year-over-year inflation expected for the second half of 2026. Commodity prices (including oil) remain volatile, creating uncertainty around future cost levels. - CPG customer strategy shifts toward prioritizing price over volume could pressure base label business volume growth, though management expects share gains to offset most potential weakness. - Large-scale customer rollouts for intelligent labels in the food vertical have extended timelines, with full revenue contribution not expected until 2027 and beyond for new pilot programs.
Analyst Q&A
Q: What is the updated 2026 growth outlook for Intelligent Labels across key verticals, compared to prior guidance? /
A: Management maintains the expectation that growth will ramp in the second half of 2026. Apparel and general retail will continue solid growth from ongoing new program rollouts. Logistics will face continued volume headwinds for the rest of the year after outsized 2025 gains, though new customer pilot expansion continues. Food will see much stronger second half contribution from the planned major U.S. grocer rollout and growing new customer activity.
Q: How should investors interpret the size and timing of the customer pre-buy unwind, and why is pre-buy activity concentrated in Europe? /
A: Total net pre-builts added ~2.5 percentage points of organic growth across the first half of 2026, all of which will reverse in the second half. Pre-buy activity is concentrated in Europe and Asia due to stronger inflationary pressures and greater customer concerns about supply surety amid ongoing geopolitical uncertainty. The unwind will be largely offset by higher year-over-year pricing in the second half.
Q: How should we frame price-cost dynamics for the second half, and is the Solutions Group's record margin the new baseline? /
A: Q2 saw high single-digit sequential inflation that was mostly offset by mid-single-digit sequential price increases. For Q3, management expects low single-digit sequential inflation and matching low single-digit sequential price increases. Solutions Group's margin expansion reflects sustainable drivers: ongoing productivity gains, volume rebound in apparel, and the reversal of 2025 tariff inefficiencies. A small moderate sequential margin moderation is expected in Q3, but second half margins will remain above 2025 levels.
Q: How will CPGs' new focus on raising prices over volume impact Avery Dennison's base label business? /
A: Management notes CPG volumes have already been flat to slightly down over the past couple years, and does not expect this strategic shift to create a fundamental change. Base label volumes are still expected to deliver low single-digit growth, supported by ongoing share gains from service excellence, innovation in high-demand sustainable film products, and flight to quality from customers seeking supply certainty amid uncertain conditions.