Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.30, up 4% excluding currency translation compared to the prior year [24] - Sales increased by 2% on an organic basis, driven by higher volume but partially offset by deflation-related price reductions [25] - Adjusted EBITDA margin was strong at 16.4%, up 10 basis points compared to the prior year [25] - Free cash flow was approximately negative $50 million, consistent with historical trends for Q1 [26] - The net debt to adjusted EBITDA ratio at quarter-end was 2.3%, following the repayment of €500 million of debt [26] Business Line Data and Key Metrics Changes - Materials Group sales were up 1% on an organic basis, driven by low single-digit volume and mix growth, while high-value categories saw high single-digit growth [28] - Solutions Group sales increased by 5% on an organic basis, with base solutions up high single digits and high-value solutions up low single digits [33][35] - Overall label materials volume was in line with expectations, with North America showing low single-digit growth and Europe down low single digits [30] Market Data and Key Metrics Changes - North America volume was up low single digits, while Europe experienced a slight decline due to a strong prior year [30] - Asia Pacific and Latin America both saw low single-digit growth compared to the prior year [30] - Apparel growth was strong, up mid-single digits, but expected to decline mid-single digits in Q2 due to tariff impacts [9][41] Company Strategy and Development Direction - The company is focused on expanding its position in high-value categories, which now make up more than a third of Materials Group sales [6] - There is a strategic collaboration with Kroger to enhance inventory management in the food sector, with ongoing large-scale grocery pilots [12] - The company continues to invest in capturing significant opportunities in intelligent labels and RFID technology, positioning itself as a market leader [15][22] Management's Comments on Operating Environment and Future Outlook - Management noted elevated macro uncertainty due to changing trade policies and a reduced global GDP growth outlook [16] - The company is prepared for a lower volume environment and has initiated scenario planning to maximize opportunities [19] - For Q2 2025, adjusted earnings per share are expected to be in the range of $2.30 to $2.50, with overall sales growth anticipated to be roughly comparable to the prior year [40] Other Important Information - The company returned $331 million to shareholders through share repurchases and dividends in the first quarter, reducing share count by 2.3% [27] - The company has a strong balance sheet with ample capacity for capital allocation, providing flexibility for future investments [22] Q&A Session Summary Question: Impact of tariff prebuying on Q1 results - Management indicated that there was no significant pull forward due to tariffs in Q1, but some muted demand was observed in late March [50][51] Question: Working capital increase in Q1 - The increase in working capital was attributed to higher incentive compensation payments and customer rebate payments, rather than specific repositioning for tariffs [66] Question: Apparel demand change from positive to negative - The shift in apparel demand is primarily related to tariff issues, particularly concerning sourcing from China [73] Question: Share buyback strategy amid uncertainty - The company increased share buybacks due to confidence in intrinsic value, despite the recent tariff uncertainties impacting the outlook [78] Question: Logistics and supply chain capacity - The company has a robust network to support customers moving sourcing from China to other countries, with ample capacity to manage increased demand [87] Question: Raw material cost impacts - Management expects limited tariff impacts on raw materials, with a stable outlook for the raw material basket despite some inflationary pressures [115][125]

Core Insights - Avery Dennison Corporation (AVY) reported adjusted earnings of $2.30 per share for Q1 2025, slightly missing the Zacks Consensus Estimate of $2.32, but showing a 0.4% year-over-year improvement [1] - Total revenues decreased by 0.1% year over year to $2.148 billion, falling short of the Zacks Consensus Estimate of $2.151 billion [2] Financial Performance - The cost of sales increased by 0.5% year over year to $1.53 billion, while gross profit fell by 1.7% to $621.5 million [2] - Marketing, general, and administrative expenses were reduced to $347 million from $365 million in the previous year, with adjusted operating profit slightly increasing to $274.5 million from $273.7 million [3] - The adjusted operating margin improved to 12.8% from 12.7% year over year [3] Segment Performance - Revenues in the Materials Group segment declined by 1.1% year over year to $1.48 billion, missing the estimate of $1.49 billion, although organic sales increased by 1.2% [4] - The Solutions Group saw a revenue increase of 2% year over year to $668 million, surpassing the estimated $655 million, with organic sales improving by 4.9% [5] Cash and Debt Position - The company returned $331 million to shareholders through share repurchases and dividends in Q1 2025, repurchasing 1.4 million shares [6] - Cash and cash equivalents at the end of the quarter were $196 million, up from $186 million a year ago, while long-term debt rose to $2.58 billion from $2.07 billion [7] - The company achieved approximately $14 million in pre-tax savings from restructuring, incurring pre-tax restructuring charges of around $5 million [7] Guidance - For Q2 2025, the company expects adjusted EPS to be between $2.30 and $2.50 [8] Stock Performance - AVY shares have decreased by 15.9% over the past year, contrasting with the industry's growth of 20.7% [9]

Core Insights - Avery Dennison reported $2.15 billion in revenue for Q1 2025, reflecting a year-over-year decline of 0.1% and an EPS of $2.30, slightly up from $2.29 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate by -0.11%, while the EPS also missed the consensus estimate by -0.86% [1] Financial Performance Metrics - Net Sales for the Solutions Group reached $668.20 million, exceeding the average estimate of $665.75 million, marking a year-over-year increase of +2.1% [4] - Net Sales for the Materials Group totaled $1.48 billion, slightly above the average estimate of $1.47 billion, but showed a year-over-year decline of -1.1% [4] - Adjusted Operating Income for the Materials Group was $230.30 million, slightly below the average estimate of $230.80 million [4] - Adjusted Operating Income for Corporate expenses was reported at -$24 million, better than the average estimate of -$25.52 million [4] - Adjusted Operating Income for the Solutions Group was $68.20 million, surpassing the average estimate of $62.56 million [4] Stock Performance - Avery Dennison's shares have returned -0.5% over the past month, compared to a -6.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Avery Dennison reported quarterly earnings of $2.30 per share, missing the Zacks Consensus Estimate of $2.32 per share, representing an earnings surprise of -0.86% [1] - The company posted revenues of $2.15 billion for the quarter, also missing the Zacks Consensus Estimate by 0.11%, with year-ago revenues remaining the same at $2.15 billion [2] - Over the last four quarters, Avery Dennison has surpassed consensus EPS estimates three times and topped revenue estimates only once [2] Stock Movement and Outlook - Avery Dennison shares have declined approximately 6.6% since the beginning of the year, while the S&P 500 has decreased by 10.1% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.55 on revenues of $2.25 billion, and for the current fiscal year, it is $9.87 on revenues of $8.9 billion [7] Industry Context - The Containers - Paper and Packaging industry, to which Avery Dennison belongs, is currently ranked in the bottom 25% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Avery Dennison's stock may be influenced by the overall outlook for the industry [8]

Financial Performance - Reported EPS for Q1 2025 was $2.09, with adjusted EPS of $2.30, reflecting a 0.4% increase and approximately 4% increase excluding currency effects[5]. - Net sales for Q1 2025 totaled $2.1 billion, a slight decrease of 0.1%, while organic sales increased by 2.3%[5]. - Net income for the three months ended March 29, 2025, was $166.3 million, down from $172.4 million in the same period last year, representing a decrease of 6.0%[29]. - Adjusted net income for the first quarter of 2025 was $182.6 million, down from $185.1 million in the first quarter of 2024, a decrease of 0.7%[49]. - The company’s adjusted net income per common share for the first quarter of 2025 was $2.30, compared to $2.29 in the same period last year, reflecting a slight increase of 0.4%[53]. Sales and Revenue Breakdown - The Materials Group reported sales of $1.5 billion, down 1.1%, but organic sales increased by 1.2%[8]. - The Solutions Group achieved reported sales of $668 million, up 2.0%, with organic sales growth of 4.9%[8]. - Total net sales for the first quarter of 2025 were $2,148.3 million, a slight decrease of 0.2% compared to $2,151.3 million in the first quarter of 2024[57]. - The reported net sales change for the total company in Q1 2025 was a slight decline of 0.1%, with the Materials Group experiencing a decrease of 1.1% and the Solutions Group showing an increase of 2.0%[63]. - Organic sales change (non-GAAP) for the total company in Q1 2025 was 2.3%, with the Materials Group at 1.2% and the Solutions Group at 4.9%[63]. Operating Performance - Adjusted operating income for the first quarter of 2025 was $274.5 million, compared to $273.7 million in the first quarter of 2024, indicating a slight increase of 0.3%[48]. - Adjusted operating income for the Materials Group in Q1 2025 was $230.3 million, down from $240.5 million in Q1 2024, reflecting a decrease of 4.9%[58]. - Adjusted EBITDA for the first quarter of 2025 was $352.4 million, up from $351.0 million in the first quarter of 2024, reflecting a growth of 0.4%[48]. - Adjusted EBITDA for the Solutions Group increased to $114.6 million in Q1 2025, compared to $105.4 million in Q1 2024, representing an increase of 10.8%[59]. - Adjusted EBITDA for the total company in Q1 2025 was $352.4 million, a decrease from $367.4 million in Q2 2024[61]. Shareholder Returns and Financial Position - The company returned $331 million to shareholders through share repurchases and dividends, repurchasing 1.4 million shares at a cost of $262 million[9]. - The net debt to adjusted EBITDA ratio was 2.3x at the end of Q1 2025, indicating a strong balance sheet[10]. - Total debt as of Q1 2025 was $3,459.1 million, with net debt standing at $3,263.2 million after accounting for cash and cash equivalents of $195.9 million[61]. - The net debt to adjusted EBITDA ratio for the last twelve months (LTM) was 2.3, indicating a stable leverage position[61]. Guidance and Future Outlook - The company expects Q2 2025 reported EPS guidance to be between $2.25 and $2.45, with adjusted EPS guidance of $2.30 to $2.50[5][13]. - Approximately $14 million in pre-tax savings were realized from restructuring actions during Q1 2025[12]. - The company plans to continue focusing on market expansion and new product development to drive future growth[60]. Tax and Cash Flow - The effective tax rate for Q1 2025 was reported at 26.7%, with an adjusted tax rate of 26.0%[11]. - Cash and cash equivalents at the end of the period were $195.9 million, an increase from $185.7 million at the end of the previous year[30]. - The company reported a net cash used in operating activities of $(16.3) million for the first quarter of 2025, compared to $119.8 million provided in the same period of 2024[55]. Current Assets and Liabilities - Total current assets increased to $3,030.4 million in 2025 from $2,886.8 million in 2024, reflecting a growth of 4.9%[27]. - Total current liabilities decreased to $2,952.8 million in 2025 from $3,308.2 million in 2024, a reduction of 10.7%[27].

Core Viewpoint - Avery Dennison Corporation (AVY) is expected to report first-quarter 2025 results on April 23, 2025, with a revenue estimate of $2.14 billion, reflecting a 0.4% decrease year-over-year, while earnings per share (EPS) is estimated at $2.32, indicating a 1.3% growth year-over-year [1]. Revenue and Earnings Estimates - The consensus estimate for AVY's first-quarter revenues is $2.14 billion, down 0.4% from the previous year [1]. - The earnings estimate for the first quarter is $2.32 per share, showing a year-over-year growth of 1.3% [1]. - The earnings estimates have been revised downwards over the past 60 days, with a current estimate of $2.32 compared to $2.33 from 7 days ago [1][6]. Earnings Surprise History - Avery Dennison has consistently beaten the Zacks Consensus Estimates in the last four quarters, with an average surprise of 3.7% [2]. - The reported earnings for the last four quarters were $2.38, $2.33, $2.42, and $2.29, with respective surprises of 0.42%, 0.43%, 7.56%, and 6.51% [3]. Segment Performance Expectations - The Materials Group segment is expected to see revenues dip by 0.6% year-over-year to $1.48 billion, with an adjusted operating profit forecasted at $263 million, reflecting a 4.5% year-over-year improvement [8]. - The Solutions Group segment is projected to generate revenues of $655 million, a slight increase of 0.1% from the prior year, with an operating profit estimate of $57 million, indicating a 0.8% increase year-over-year [9][10]. - Factors influencing performance include improved volumes in both segments, but higher costs for raw materials, labor, and freight are expected to impact margins [7]. Stock Performance - Avery Dennison's stock has decreased by 18.3% over the past year, compared to a 22.5% decline in the industry [11].

Company Performance - Avery Dennison Corporation (NYSE: AVY) reported a 19% growth in EPS for 2024, indicating a strong recovery from the destocking period that negatively impacted its bottom line [1] - The company is transitioning towards higher-value products, which may enhance its future profitability and market position [1] Investment Insights - The article highlights the investment strategies of Robert F. Abbott, who has been managing investments since 1995 and has incorporated options trading since 2010, suggesting a focus on risk management and income generation through covered calls and collars [1]

Financial Performance - Net sales for 2024 were $8,755.7 million, an increase of 4.67% compared to $8,364.3 million in 2023[294]. - Gross profit rose to $2,530.7 million in 2024, up from $2,277.5 million in 2023, reflecting a gross margin improvement[294]. - Net income for 2024 was $704.9 million, representing a 39.9% increase from $503.0 million in 2023[294]. - Total assets increased to $8,404.2 million in 2024, compared to $8,209.8 million in 2023, indicating a growth of 2.37%[293]. - Retained earnings grew to $5,151.2 million in 2024, up from $4,691.8 million in 2023, marking an increase of 9.8%[298]. - Total current liabilities rose to $2,862.6 million in 2024, compared to $2,699.5 million in 2023, an increase of 6.04%[293]. - Net cash provided by operating activities increased to $938.8 million in 2024 from $826.0 million in 2023, reflecting a growth of 13.6%[299]. - Cash and cash equivalents at the end of 2024 were $329.1 million, up from $215.0 million at the end of 2023, representing a 53.1% increase[299]. - Dividends paid in 2024 totaled $277.5 million, compared to $256.7 million in 2023, an increase of 8.1%[299]. - The company reported a decrease in inventories by $90.7 million in 2024, contrasting with an increase of $111.7 million in 2023[299]. Shareholder Returns - The company repurchased 1,184,780 shares for treasury at a cost of $247.5 million during the year[298]. - Dividends per share increased to $3.45 in 2024 from $3.18 in 2023, reflecting a commitment to returning value to shareholders[298]. - The weighted average number of common shares outstanding was 80.4 million in 2024, slightly down from 80.7 million in 2023[294]. - The company had $346.9 million remaining authorized for share repurchase as of December 28, 2024, under the Board's authorization from April 2022[445]. Risk Management - The company aims to manage foreign currency exchange risks by entering into forward, option, and swap contracts, although it does not fully hedge its foreign currency translation exposure[272]. - The estimated maximum potential one-day loss in earnings for foreign exchange positions and contracts was not significant at year-end 2024 or 2023[277]. - The company faces risks related to international operations, including geopolitical conditions, fluctuations in foreign currency exchange rates, and changes in demand affecting sales[1]. - The company is exposed to fluctuations in the cost and availability of raw materials and energy, which can impact its business operations[1]. - The company is subject to risks associated with legal and regulatory matters, including compliance and anti-corruption, environmental, health and safety, and trade compliance[1]. Product Development and Innovation - The company has a focus on the timely development and market acceptance of new products, including sustainable or sustainably-sourced products[1]. - Research and development costs related to new products and applications are expensed as incurred, reflecting the company's commitment to innovation[337]. Acquisitions and Investments - The company completed three business acquisitions in 2023, including Silver Crystal Group, LG Group, and Thermopatch, with an aggregate purchase consideration of approximately $231 million[349][350]. - The 2022 acquisitions of TexTrace and Rietveld had an aggregate purchase consideration of approximately $35 million, funded through cash and commercial paper borrowings[352]. - Approximately $94 million of identifiable finite-lived intangible assets were acquired in 2023, including $68.8 million in customer relationships with a weighted average amortization period of 11 years[357][359]. Debt and Financing - Long-term borrowings increased to $539.2 million in 2024 from $394.9 million in 2023, reflecting a growth of 36.5%[299]. - The company issued €500 million of senior notes in November 2024, with net proceeds of approximately $539 million intended for repaying maturing senior notes and general corporate purposes[369]. - The fair value of total debt was $3.01 billion as of December 28, 2024, down from $3.11 billion as of December 30, 2023[379]. - The company had no outstanding borrowings from U.S. commercial paper as of December 28, 2024, down from $112 million as of December 30, 2023, with a weighted average interest rate of 5.54%[364]. Pension and Employee Benefits - The projected benefit obligations for U.S. pension benefits decreased from $51.8 million in 2023 to $49.3 million in 2024, while non-U.S. obligations increased from $586.9 million to $679.9 million[401]. - The funded status of U.S. pension plans showed a deficit of $44.6 million in 2024 compared to a deficit of $49.3 million in 2023, indicating an improvement of approximately 9.5%[403]. - The net periodic benefit cost for U.S. pension plans in 2024 was $2.5 million, compared to a credit of $1.4 million in 2023, indicating a shift in cost[407]. - Expected contributions for U.S. pension plans in 2025 are projected at $6.2 million, while Non-U.S. pension plans are expected to receive $17.5 million[409]. Stock-Based Compensation - Stock-based compensation expenses increased to $28.7 million in 2024 from $22.3 million in 2023, a rise of 28.8%[299]. - The company had approximately $38 million of unrecognized compensation expense related to unvested stock-based awards as of December 28, 2024, expected to be recognized over two years[451]. - The total intrinsic value of stock options exercised in 2024 was $19.5 million, with approximately $10 million received from these exercises[455]. Restructuring and Operational Changes - Total restructuring charges for 2024 amounted to $28.8 million, net of reversals, related to the reduction of approximately 1,280 positions[468]. - Restructuring charges of $13.1 million were recorded in Q4 2024 related to the reduction of approximately 90 positions[466]. - Restructuring charges of $49.0 million were recorded in 2023, net of reversals, related to the reduction of approximately 1,450 positions[468].

Fourth Quarter and Full Year 2024 Financial Review and Analysis (preliminary, unaudited) January 30, 2025 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year. January 30, 2025 Preliminary & unaudited, Q4 & FY 2024 financial review and analysis 1 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 Litigat ...

Core Insights - Avery Dennison Corporation (AVY) reported adjusted earnings of $2.38 per share for Q4 2024, surpassing the Zacks Consensus Estimate of $2.37, marking a 10% year-over-year increase [1][2] - Total revenues for Q4 2024 reached $2.19 billion, a 3.6% increase year-over-year, although it fell short of the Zacks Consensus Estimate of $2.20 billion [3][10] - The company’s adjusted EPS for the full year 2024 was $9.43, exceeding the Zacks Consensus Estimate of $9.41, and represented a 19% year-over-year increase [9] Financial Performance - The cost of sales improved by 4.1% year-over-year to $1.58 billion, while gross profit rose 2.2% to $609 million [3] - Marketing, general and administrative expenses decreased to $329 million from $335 million in the previous year, with adjusted operating profit increasing to approximately $280 million from $261 million [4] - The adjusted operating margin improved to 12.8% compared to 12.4% in the prior-year quarter [4] Segment Performance - Revenues in the Materials Group segment increased by 3.7% year-over-year to $1.47 billion, although it missed the estimate of $1.48 billion [5] - The Solutions Group saw revenues rise by 3.2% year-over-year to $714 million, also falling short of the estimated $735 million [6] - Adjusted operating income for the Materials Group increased by 9.6% to $217.5 million, while the Solutions Group's adjusted operating income grew by 0.9% to $81 million [5][6] Cash and Debt Position - The company returned $525 million to shareholders through share repurchases and dividends in 2024, repurchasing 1.2 million shares [7] - Cash and cash equivalents at the end of 2024 were $329 million, up from $215 million at the end of 2023 [7] - Long-term debt decreased to $2.56 billion from $2.62 billion, with a net debt to adjusted EBITDA ratio of 2.0X [7] Future Guidance - For 2025, Avery Dennison expects adjusted EPS to be between $9.80 and $10.20 [11] Stock Performance - Avery Dennison's shares have declined by 1.7% over the past year, compared to a 6.3% decline in the industry [12]