Avery Dennison Corp (AVY): Results of Operations and Financial Condition
Avery Dennison Corp (AVY) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 For Immediate Release AVERY DENNISON ANNOUNCES SECOND QUARTER 2026 RESULTS Delivered strong sales, earnings, and cash flow growth ● 2Q26 Reported EPS of $2.67 ○ Adjusted EPS (non-GAAP) of $2.89, up 19.4% ● 2Q26 Net sales of $2.5 billion, up 10.9% ○ Sales change ex. c
How this was made
The 30-second read
Why it matters
The combination of quarterly EPS beat language, segment margin expansion, and full-year EPS guidance ranges provides a direct input for earnings-model updates and near-term positioning.
Market read
Traders can update valuation and expectations immediately using the disclosed 2Q26 EPS and the FY26 EPS guidance ranges.
What to watch
Adjusted EPS excludes other items and restructuring impacts; traders should watch how much of the margin expansion is sustainable versus productivity timing and raw-material re-engineering benefits.
Avery Dennison announces second quarter 2026 results, with net sales up 10.9%, adjusted EPS up 19.4%, and full-year adjusted EPS guidance of $10.00 to $10.30.
Reported sales, adjusted earnings, adjusted operating income, adjusted EBITDA, and net income increased year over year. Materials Group delivered double-digit reported and organic sales growth, while Solutions Group returned to ex-currency and organic growth despite a reported sales decline. Margin expansion, shareholder returns, and reaffirmed full-year EPS ranges support the strong result.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net salesGAAP | $2,462.9 million | – | 10.9% |
| Sales change ex. currencynon-GAAP | 8.9% | – | 8.9% |
| Organic sales changenon-GAAP | 7.6% | – | 7.6% |
| Reported EPSGAAP | $2.67 | – | – |
| Adjusted EPSnon-GAAP | $2.89 | – | 19.4% |
| Adjusted operating incomenon-GAAP | $334.6 million | – | 16.7% |
| Adjusted operating marginnon-GAAP | 13.6% | – | – |
| Adjusted EBITDAnon-GAAP | $421.0 million | – | 14.6% |
| Adjusted EBITDA marginnon-GAAP | 17.1% | – | – |
| Net incomeGAAP | $204.1 million | – | 8.0% |
| Net income marginGAAP | 8.3% | – | – |
| Adjusted net incomenon-GAAP | $220.5 million | – | 16.4% |
| Adjusted net income marginnon-GAAP | 9.0% | – | – |
| Reported effective tax rateGAAP | 27.8% | – | – |
| Adjusted tax ratenon-GAAP | 27.4% | – | – |
| Reported effective tax rate for the six months ended June 30, 2026GAAP | 28.8% | – | – |
| Adjusted tax rate for the six months ended June 30, 2026non-GAAP | 26.8% | – | – |
| Pre-tax savings from restructuring actions in the first half of 2026other | approximately $34 million | – | – |
| Pre-tax restructuring charges in the first half of 2026GAAP | approximately $34 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Materials GroupSales were up 11.5% ex. currency and up 9.7% on an organic basis. Volume/mix growth was high single digits and price was up low single digits; high-value categories were up mid-single digits and base categories were up low double digits. | $1,796.1 million | – | 15.9% |
| Solutions GroupSales were up 2.6% ex. currency and up 2.6% on an organic basis. High-value categories and base categories were each up low single digits, while overall apparel categories were up high single digits. | $666.8 million | – | (0.5)% |
full year 2026 outlook
- NoteReported EPS of $9.40 to $9.70
- NoteAdjusted EPS of $10.00 to $10.30
- NoteExcluding an estimated $0.60 per share impact of other items and restructuring charges
Capital returns
- During the first half of 2026, the company returned $347 million in cash to shareholders through a combination of share repurchases and dividends.
- The company repurchased 1.2 million shares, with payments for share purchases totaling $198 million.
- Net of dilution from long-term incentive awards, the company’s share count at the end of the second quarter was down 2.1 million compared to the same time last year.
What drove it
- Total reported net sales increased 10.9%, with 8.9% sales growth ex. currency and 7.6% organic sales growth.
- Materials Group organic sales increased 9.7%, supported by high-single-digit volume/mix growth, low-single-digit price growth, and growth in both high-value and base categories.
- Materials Group adjusted EBITDA margin was 18.0%, up 20 basis points, as volume, productivity, and the net benefit of pricing and raw material costs, including raw material re-engineering, were partially offset by mix and higher employee-related costs.
- Solutions Group adjusted EBITDA margin was 18.6%, up 150 basis points, as productivity was partially offset by higher employee-related costs.
- Adjusted operating income increased 16.7% and adjusted net income increased 16.4%.
Concerns
- Solutions Group reported sales decreased 0.5%, despite 2.6% growth ex. currency and on an organic basis.
- Materials Group margin benefits were partially offset by mix and higher employee-related costs.
- Solutions Group productivity benefits were partially offset by higher employee-related costs.
- The company identified global economic conditions, tariffs, geopolitical uncertainty, foreign currency fluctuations, raw-material cost and availability, and acquisition execution and integration as potential risks.
What to watch
- Whether Materials Group sustains high-single-digit volume/mix growth and the stated growth in high-value and base categories.
- Whether Solutions Group converts ex-currency and organic growth into reported sales growth.
- The sustainability of productivity, pricing, raw-material re-engineering, and margin expansion.
- Progress toward full-year 2026 reported EPS guidance of $9.40 to $9.70 and adjusted EPS guidance of $10.00 to $10.30.
- The pace of shareholder returns, including share repurchases and dividends, and net debt to adjusted EBITDA.
Balance sheet and cash flow
- Net debt to adjusted EBITDA (non-GAAP) was 2.3x at the end of the second quarter.
- The release described second-quarter cash flow growth but did not provide an operating cash flow or free cash flow amount.
Analysis
Avery Dennison reported a strong second quarter, with total net sales of $2,462.9 million, up 10.9%, including 8.9% growth ex. currency and 7.6% organic growth. Adjusted EPS was $2.89, up 19.4%, while GAAP net income increased to $204.1 million and adjusted net income increased to $220.5 million. The results point to broad underlying sales growth rather than a result driven solely by currency.
Materials Group was the principal growth contributor. Sales rose 15.9% to $1,796.1 million, including 9.7% organic growth, with high-single-digit volume/mix growth and low-single-digit price growth. Both high-value and base categories grew, while the segment's adjusted operating margin reached 15.8% and adjusted EBITDA margin reached 18.0%. The company attributed margin expansion to volume, productivity, and the net benefit of pricing and raw-material costs, including raw-material re-engineering, partly offset by mix and higher employee-related costs.
Solutions Group had a more mixed top-line result. Reported sales declined 0.5% to $666.8 million, but sales increased 2.6% both ex. currency and organically. Growth in high-value categories, base categories, and overall apparel categories accompanied significant margin improvement: adjusted operating margin was 11.5%, up 150 basis points, and adjusted EBITDA margin was 18.6%, also up 150 basis points. Productivity supported that expansion, although higher employee-related costs remained an offset.
Profitability increased faster than sales on an adjusted basis. Adjusted operating income increased 16.7% to $334.6 million, with adjusted operating margin of 13.6% versus 12.9%. Adjusted EBITDA increased 14.6% to $421.0 million, and adjusted net income increased 16.4% to $220.5 million. GAAP net income margin was 8.3% compared with 8.5%, while adjusted net income margin was 9.0% compared with 8.5%, making the difference between reported and adjusted profitability important to monitor.
Capital allocation remained active during the first half of 2026. Avery Dennison returned $347 million in cash to shareholders, repurchased 1.2 million shares for $198 million, and reported that its share count was down 2.1 million year over year net of long-term incentive dilution. Net debt to adjusted EBITDA was 2.3x at quarter-end. The company maintained full-year 2026 reported EPS guidance of $9.40 to $9.70 and adjusted EPS guidance of $10.00 to $10.30, excluding an estimated $0.60 per share impact of other items and restructuring charges.
Management, verbatim
We delivered very strong second quarter results, marked by stronger-than-anticipated sales growth, solid margin expansion and adjusted EPS of $2.89, reflecting the strength of our portfolio and our team’s execution excellence.
Deon Stander, president and CEO
Our focus on innovation and service-led differentiation continues to deliver for our customers, driving strong organic sales growth across both our high-value categories and base businesses.
Deon Stander, president and CEO
Not in the filing
stated, not guessed- GAAP gross profit and gross margin
- Non-GAAP gross profit and gross margin
- GAAP operating income and operating margin
- GAAP diluted EPS prior-year figure and year-over-year change
- Adjusted EPS prior-year figure
- Operating cash flow amount
- Free cash flow amount
- Cash and cash equivalents balance
- Total debt balance
- Net debt amount
- Quarterly dividend amount
- Revenue, gross-margin, operating-expense, and tax-rate guidance
- Prior-quarter comparisons for reported metrics
- Prior guidance for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K furnishing the company’s 2Q26 results and FY26 EPS guidance, including segment operating margin and capital deployment details.
Ticker impact
Avery Dennison reported 2Q26 EPS of $2.67 ($2.89 adjusted) and raised FY26 reported EPS guidance to $9.40 to $9.70.
Likely positive bias for AVY into the next trading session as traders price in stronger-than-anticipated sales growth and higher adjusted EPS.
The filing is a primary-source 8-K with quantified quarterly results and full-year EPS ranges, plus segment margin detail and capital return updates.
Market effects
Signals demand resilience and pricing/product mix strength in labeling and digital identification materials, relevant to industrial materials and packaging supply chains.
Limited direct regional read-through; results are global with currency-adjusted growth cited.
Moderate, as materials science and RFID/labeling demand can reflect broader consumer, retail, logistics, and pharma packaging activity.
Counterpoint
Solutions Group sales were slightly down year over year (-0.5% reported), so consolidated strength may mask softness in apparel-related categories.
Key entities
- issuerAvery Dennison Corporation
Reported 2Q26 results and provided FY26 reported and adjusted EPS guidance in an 8-K.
- executiveDeon Stander
CEO quoted on performance, organic sales growth, and margin expansion.
