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From a margin perspective, adjusted EBITDA margin was 16.6%, down 40 basis points compared to the prior year. This reflects the impact of higher employee-related costs and some one-time benefits in the prior year fourth quarter, which our team worked diligently to partially offset through the benefits of our ongoing productivity actions. In Solutions Group, sales increased roughly 1.5%. This segment continues to lead our portfolio shift, with high-value categories now representing 60% of the Solutions Group ...

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $9.53 and $707 million of adjusted free cash flow for the full year 2025, demonstrating the durability of its franchise [3][15] - Adjusted EBITDA margin was 16.4% for the full year, reflecting resilience despite headwinds from trade policy changes and softer consumer sentiment [3][15] - Fourth quarter adjusted EPS was $2.45, up 3% compared to the prior year, driven by higher volume and productivity [15][25] Business Line Data and Key Metrics Changes - In the Materials Group, reported sales increased by 5%, although organic sales were slightly down due to deflation-related price reductions [4][17] - The Solutions Group saw sales increase by approximately 1.5%, with high-value categories now representing 60% of the portfolio, which helped offset declines in base solutions [6][19] - Intelligent Labels within the enterprise-wide platform grew mid-single digits, driven by strong performance in food, logistics, and other categories [7][20] Market Data and Key Metrics Changes - In developed markets, North America experienced low single-digit volume mix declines, while Europe delivered mid-single-digit growth [17] - Emerging markets in Asia Pacific and Latin America were up low single digits, indicating some resilience in these regions [17] - The apparel business was down roughly 7%, impacted by tariff-related uncertainties, while other categories like food and logistics showed high teens growth in Q4 [6][8] Company Strategy and Development Direction - The company is focused on driving growth in high-value categories, which now represent approximately 45% of total sales, and aims to expand this further [9][10] - There is a strong emphasis on innovation and digital capabilities to enhance operational productivity and customer solutions [10][11] - The company plans to maintain a disciplined capital allocation strategy while continuing to invest in productivity and innovation to strengthen market positions [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to stronger growth despite ongoing macroeconomic challenges, with expectations for adjusted EPS growth of approximately 6% in Q1 2026 [13][25] - The company anticipates that growth in high-value categories will continue to be a key driver, with a focus on expanding customer adoption and market penetration [9][39] - Management acknowledged the need to improve organic revenue growth and is taking decisive actions to address this trajectory [9][13] Other Important Information - The company achieved its 2025 sustainability objectives, including reducing energy intensity and enabling more sustainable products [11][12] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 2.4, and the company returned approximately $860 million to shareholders in 2025 [16][25] Q&A Session Questions and Answers Question: Can you provide more detail on the 40 basis point drop in margin? - The drop was attributed to soft base volumes, wage inflation, and some one-time benefits in the prior year, along with the impact of extra calendar days in Q4 [28][30] Question: What are the growth expectations for Intelligent Labels in 2026? - Growth is anticipated to be above the low single digits seen in 2025, driven by increased adoption in apparel and logistics sectors [37][39] Question: How do high-value categories compare in margin to core categories? - High-value categories typically have higher variable margins than the rest of the portfolio, contributing to overall margin expansion [44][46] Question: Has the Walmart partnership increased inquiries from other grocery sellers? - Yes, the partnership has catalyzed interest from other grocery sellers, leading to a growing pipeline of inquiries [52][53] Question: What is the expected impact of temporary savings on 2026? - Temporary savings from incentive compensation in 2025 will be a headwind in 2026, similar in magnitude to the $50 million restructuring actions [55][56] Question: What is the outlook for the apparel market in 2026? - There is uncertainty due to tariff policies, but growth is expected as retailers adjust their supply chain strategies [61][63]

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $9.53 and generated $707 million of adjusted free cash flow for the full year 2025, demonstrating the durability of its franchise [3][14] - Adjusted EBITDA margin was maintained at 16.4% for the full year, despite headwinds from trade policy changes and softer consumer sentiment [3][14] - In Q4, adjusted EPS was $2.45, up 3% compared to the prior year, with reported sales increasing by 3.9% [13][14] Business Line Data and Key Metrics Changes - In the Materials Group, reported sales increased by 5%, with low single-digit volume and mix growth offset by deflation-related price reductions [4][15] - The Solutions Group saw sales increase by approximately 1.5%, with high-value categories representing 60% of the portfolio [5][19] - Intelligent Labels within the Solutions Group grew mid-single digits, driven by food, logistics, and industrial categories [6][18] Market Data and Key Metrics Changes - In developed markets, North America experienced low single-digit volume mix declines, while Europe delivered mid-single-digit growth [15] - Emerging markets in Asia Pacific and Latin America were up low single digits [15] - The apparel business was down approximately 7%, impacted by tariff-related uncertainties [5][56] Company Strategy and Development Direction - The company is focused on driving growth in high-value categories, which now represent 45% of sales, and aims to expand this further [8][10] - There is a commitment to accelerating innovation and enhancing digital capabilities to improve operational productivity and customer solutions [9][10] - The company achieved its 2025 sustainability objectives and is making progress towards its 2030 goals [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to stronger growth in 2026, anticipating adjusted earnings per share growth of approximately 6% at the midpoint [11][21] - The company does not expect macroeconomic tailwinds in the near term, focusing instead on internal levers to drive performance [11][38] - There is a recognition of the need to improve organic revenue growth, with decisive actions being taken to address this [8][12] Other Important Information - The company returned approximately $860 million to shareholders in 2025, including $572 million in buybacks and $288 million in dividends [14] - The balance sheet remains strong, with a net debt to adjusted EBITDA ratio of 2.4 [14] Q&A Session Summary Question: Can you provide more details on the 40 basis point drop in margin? - The drop was attributed to soft base volumes, wage inflation, and some one-time benefits in the prior year [26][28] Question: What are the growth expectations for Intelligent Labels in 2026? - Growth is anticipated to be above the low single digits achieved in 2025, driven by increased adoption in apparel and logistics [32][34] Question: How do high-value categories compare in margin to core categories? - High-value categories typically have higher variable margins than the rest of the portfolio, contributing to overall margin expansion [40][42] Question: What impact has the Walmart partnership had on inquiries from other grocery sellers? - The partnership has increased interest and inquiries from other grocery sellers, leading to potential pilots and trials [47][48] Question: What is the expected timing for restructuring benefits throughout 2026? - Restructuring benefits are expected to be balanced across the year, with a more significant impact in the middle quarters [68][70] Question: What actions are being taken to drive organic growth in high-value categories? - The company is focusing on new customer acquisition, accelerating innovation outcomes, and leveraging digital capabilities [75][78]

Avery Dennison (NYSE:AVY) Q4 2025 Earnings call February 04, 2026 11:00 AM ET Speaker2Ladies and gentlemen, welcome to Avery Dennison's Earnings Conference Call for the fourth quarter, ended on December 31, 2025. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a Q&A section. At that time, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and enter the queue. As a reminder, this webcast is being recorded ...

Key Takeaways AVY posted Q4 adjusted EPS of $2.45, beating estimates, as revenues rose 3.9% y/y to $2.27B.AVY expanded the gross margin to 28.7% as cost of sales improved and gross profit increased 6.8% y/y.AVY returned $861 million to shareholders in 2025 via buybacks and dividends, repurchasing 3.2 million shares.Avery Dennison Corporation (AVY) has delivered adjusted earnings of $2.45 per share in fourth-quarter 2025, beating the Zacks Consensus Estimate of $2.40. The bottom line increased 2.9% year over ...

Fourth Quarter and Full Year 2025 Financial Review and Analysis (preliminary, unaudited) February 4, 2026 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year. Safe Harbor Statement Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other busine ...

Avery Dennison (AVY) reported $2.27 billion in revenue for the quarter ended December 2025, representing a year-over-year increase of 3.9%. EPS of $2.45 for the same period compares to $2.38 a year ago.The reported revenue represents a surprise of -0.94% over the Zacks Consensus Estimate of $2.29 billion. With the consensus EPS estimate being $2.40, the EPS surprise was +2.08%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Str ...

Financial Performance - FY25 reported EPS was $8.79, with adjusted EPS of $9.53, reflecting a 1% increase year-over-year[4] - FY25 net sales reached $8.9 billion, also up 1% compared to the previous year[4] - 4Q25 reported EPS was $2.15, while adjusted EPS increased by 3% to $2.45[4] - 4Q25 net sales totaled $2.3 billion, marking a 4% increase year-over-year[4] - Total net sales for 2025 reached $8,855.5 million, a 1.1% increase compared to 2024's $8,755.7 million[28] - Total net sales for the three months ended December 31, 2025, were $2,271.2 million, an increase from $2,185.7 million for the same period in 2024, representing a growth of 3.9%[50] Cash Flow and Shareholder Returns - The company generated over $700 million in adjusted free cash flow during FY25[3] - The company returned $861 million to shareholders in FY25 through dividends and share repurchases[11] - The company reported adjusted free cash flow of $707.1 million, up from $699.5 million in the previous year[28] - Adjusted free cash flow for the three months ended December 31, 2025, was $302.6 million, compared to $279.5 million for the same period in 2024, reflecting an increase of 8.2%[48] Profitability Metrics - Adjusted operating income for 2025 was $1,123.8 million, a slight increase of 0.2% from $1,122.1 million in 2024, with margins at 12.7%[28] - Adjusted EBITDA for the year was $1,452.0 million, up 1.2% from $1,434.3 million, maintaining a margin of 16.4%[28] - Adjusted operating income for the three months ended December 31, 2025, was $281.5 million, compared to $279.9 million for the same period in 2024, reflecting a slight increase[45] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $1,452.0 million, up from $1,434.3 million for the twelve months ended December 28, 2024, indicating a growth of 1.2%[45] Income and Margins - Reported net income for 2025 was $688.0 million, down 2.4% from $704.9 million in 2024, with adjusted net income at $746.3 million, a decrease of 1.9%[28] - Adjusted net income for the three months ended December 31, 2025, was $189.4 million, compared to $191.4 million for the same period in 2024, showing a decrease of 1.0%[47] - Adjusted net income per common share for the three months ended December 31, 2025, was $2.45, an increase from $2.38 for the same period in 2024, representing a growth of 2.9%[47] Debt and Leverage - The net debt to adjusted EBITDA ratio was 2.4x at the end of 4Q25, indicating a strong balance sheet[12] - Long-term debt rose to $3,210.0 million from $2,559.9 million, indicating increased leverage[32] - The company's total debt stood at $3,732.9 million, with net debt calculated at $3,530.1 million after accounting for cash and cash equivalents of $202.8 million[54] - The net debt to adjusted EBITDA ratio for the last twelve months (LTM) was 2.4[54] Operational Efficiency - Cost reduction actions in 2025 resulted in over $60 million in pre-tax savings[14] - High-value categories now account for approximately 45% of total revenue, driving outsized growth[5] Group Performance - The Materials Group reported net sales of $6,093.3 million, reflecting a 1.3% increase, while the Solutions Group saw a 0.7% increase to $2,762.2 million[28] - The Materials Group reported net sales of $1,547.0 million for the three months ended December 31, 2025, an increase from $1,472.0 million for the same period in 2024, reflecting a growth of 5.1%[50] - Adjusted operating income for the Materials Group was $219.3 million for the three months ended December 31, 2025, compared to $217.5 million for the same period in 2024[52] - Adjusted EBITDA for the Solutions Group was $128.8 million for the three months ended December 31, 2025, reflecting an increase from $127.2 million in the prior year[52] Tax and Currency Impact - The adjusted tax rate for the three months ended December 31, 2025, was 23.6%, compared to 25.7% for the same period in 2024, indicating a decrease in the effective tax burden[47] - The company experienced a foreign currency translation impact of (1.7)% on reported net sales for the three months ended December 31, 2025[56]

Core Insights - Avery Dennison Corporation reported solid full-year results for 2025, with an adjusted EPS of $9.53, indicating the durability of its business model [1] Financial Performance - The company announced preliminary, unaudited results for its fourth quarter and full year ended December 31, 2025 [1] - Non-GAAP financial measures referenced in the release are reconciled from GAAP in the attached financial schedules [1]