AVY · Avery Dennison Corporation

Avery Dennison delivered a strong first quarter in 2026, with adjusted EPS of $2.47 representing 7.4% growth year-over-year. The performance was driven by a 7.0% increase in reported net sales to $2.3 billion, or 1.1% on an organic basis, highlighting the resilience of the company's portfolio amidst a dynamic macroeconomic environment. Management attributed the results to the successful execution of a clear strategy focused on innovation, commercial excellence, and rigorous cost management, which helped offset inflationary pressures.

Segment performance was mixed but complementary. The Materials Group posted robust sales growth of 11.4% (1.9% organic), fueled by mid-single-digit volume/mix growth in base categories, despite deflation-related price reductions. Conversely, the Solutions Group faced headwinds, with sales declining 2.8% (-0.9% organic) due to softer demand in intelligent labels and base categories, though high-value categories like Embelex and Vestcom showed mid-single-digit growth. Profitability remained solid at the corporate level, with adjusted EBITDA margin holding steady at 16.4%, as productivity gains and pricing actions offset higher employee-related costs and mix challenges.

Financial discipline was evident in the company's capital allocation. Avery Dennison generated $104.4 million in adjusted free cash flow, a significant improvement from the prior year, and returned $133 million to shareholders through dividends and share repurchases. The balance sheet remained strong with a net debt to adjusted EBITDA ratio of 2.4x. Looking ahead, management provided second-quarter 2026 guidance for adjusted EPS in the range of $2.43 to $2.53, signaling confidence in continued earnings growth while acknowledging potential sequential headwinds from inventory destocking.