Avery Dennison Q2 Earnings Beat, Raises Full-Year Guidance
AVY is trading near its 52-week low of $152.42 (10% above the low).
Summary
Avery Dennison reported Q2 adjusted EPS of $2.89, up 19%, on 7.6% organic sales growth, and raised full-year adjusted EPS guidance to $10.00–$10.30. Strong cash flow funded $214 million in shareholder returns.
Key Events · Earnings and Guidance · AVY
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Q2 Earnings Beat
Adjusted EPS of $2.89, up 19.4% year-over-year, driven by 7.6% organic sales growth and 50 bps adjusted EBITDA margin expansion to 17.1%.
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Full-Year Guidance Raised
FY 2026 adjusted EPS guidance raised to $10.00–$10.30 (from prior implied ~$9.75–$10.05), reflecting stronger demand and productivity; reported EPS seen at $9.40–$9.70.
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Strong Cash Generation
Adjusted free cash flow of $365 million in Q2, enabling $214 million returned to shareholders via $198 million in buybacks and $149 million in dividends.
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Inventory Stocking Boost
Management estimates customer inventory stocking contributed ~half of organic growth and ~$0.25 of EPS; expects majority to unwind in Q3, causing a steeper sequential earnings decline.
Analysis · AVY · Manufacturing
Avery Dennison delivered a strong second quarter, with adjusted EPS of $2.89 beating expectations and growing 19% year-over-year. Organic sales rose 7.6%, driven by volume growth in both high-value and base categories. The company raised its full-year adjusted EPS guidance to $10.00–$10.30, reflecting confidence in sustained demand and productivity gains. Robust free cash flow of $365 million supported $214 million in shareholder returns during the quarter. The balance sheet remains solid with net leverage at 2.3x. The only caution is that about half of the organic growth and $0.25 of EPS came from customer inventory stocking, which is expected to unwind in the second half, leading to a steeper-than-usual sequential earnings decline in Q3.
At the time of this filing, AVY was trading at $167.99 on NYSE in the Manufacturing sector, with a market capitalization of approximately $12.8B. The 52-week trading range was $152.42 to $199.54. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.