Avery Dennison Reports Strong Q1 Adjusted EPS Growth and Significant Free Cash Flow Improvement

summarizeSummary

Avery Dennison announced strong Q1 2026 results, with adjusted EPS up 7.4% to $2.47 and a significant improvement in adjusted free cash flow to $104.4 million, alongside Q2 adjusted EPS guidance of $2.43 to $2.53.

check_boxKey Events

• Strong Q1 Adjusted EPS Growth

  Reported adjusted EPS of $2.47 for Q1 2026, an increase of 7.4% compared to the prior year, exceeding the midpoint of guidance.

• Significant Free Cash Flow Turnaround

  Generated $104.4 million in adjusted free cash flow in Q1 2026, a substantial improvement from a negative $53.1 million in the same period last year.

• Modest Organic Sales Growth

  Achieved 1.1% organic sales growth in Q1 2026, with total net sales up 7.0% to $2.3 billion.

• Q2 EPS Guidance Provided

  Issued Q2 2026 adjusted EPS guidance in the range of $2.43 to $2.53, with anticipated reported sales growth of 2-4% and organic sales growth of 0-2%.

auto_awesomeAnalysis

Avery Dennison reported robust first-quarter results, with adjusted EPS increasing 7.4% year-over-year to $2.47, surpassing the midpoint of their guidance. A key highlight is the substantial turnaround in adjusted free cash flow, which reached $104.4 million compared to a negative $53.1 million in the prior year. While organic sales growth was modest at 1.1%, the company demonstrated strong cost management and productivity. The filing also provides second-quarter adjusted EPS guidance of $2.43 to $2.53, which was previously reported by news outlets on the same day. The company continues its disciplined capital allocation, returning $133 million to shareholders through dividends and share repurchases, and maintains a healthy balance sheet with a net debt to adjusted EBITDA ratio of 2.4x.