Core Insights - Avery Dennison reported $2.19 billion in revenue for Q4 2024, a year-over-year increase of 3.6% [1] - The EPS for the same period was $2.38, up from $2.16 a year ago, with a surprise of +0.42% over the consensus estimate [1] - The revenue fell short of the Zacks Consensus Estimate by -0.57% [1] Financial Performance Metrics - Net Sales for the Solutions Group were $713.70 million, compared to the estimated $735.97 million, reflecting a +3.2% change year-over-year [4] - Net Sales for the Materials Group were $1.47 billion, matching the estimated figure, with a +3.8% change year-over-year [4] - Adjusted Operating income for Corporate expenses was -$18.80 million, better than the estimated -$21.09 million [4] - Adjusted Operating income for the Solutions Group was $81.20 million, below the estimated $83.13 million [4] - Adjusted Operating income for the Materials Group was $217.50 million, slightly below the estimated $220.03 million [4] Stock Performance - Avery Dennison shares returned +3.1% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Core Insights - Avery Dennison (AVY) reported quarterly earnings of $2.38 per share, exceeding the Zacks Consensus Estimate of $2.37 per share, and up from $2.16 per share a year ago, indicating an earnings surprise of 0.42% [1] - The company posted revenues of $2.19 billion for the quarter ended December 2024, which was below the Zacks Consensus Estimate by 0.57%, but up from $2.11 billion year-over-year [2] - The stock has gained approximately 3.1% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.41, with expected revenues of $2.22 billion, and for the current fiscal year, the consensus EPS is $10.34 on revenues of $9.13 billion [7] - The estimate revisions trend for Avery Dennison has been unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Office Supplies industry, to which Avery Dennison belongs, is currently ranked in the bottom 23% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Acco Brands (ACCO), is expected to report quarterly earnings of $0.41 per share, reflecting a year-over-year increase of 5.1%, with revenues projected at $455.06 million, down 6.9% from the previous year [9]

Financial Performance - FY24 reported EPS was $8.73, with adjusted EPS of $9.43, reflecting a 19% increase year-over-year [5]. - FY24 net sales reached $8.8 billion, up 4.7%, with organic sales growth of 4.5% [5]. - 4Q24 reported EPS was $2.16, while adjusted EPS was $2.38, marking a 10% increase compared to the previous year [5]. - 4Q24 net sales totaled $2.2 billion, up 3.6%, with organic sales growth of 3.3% [5]. - Total net sales for 2024 reached $8,755.7 million, a 4.7% increase compared to $8,364.3 million in 2023 [26]. - Reported net income for 2024 was $704.9 million, a 40% increase from $503.0 million in 2023, resulting in net income per share of $8.73, up 41% [26][28]. - Adjusted net income for 2024 was $760.9 million, a 19% increase from $640.9 million in 2023, with adjusted net income per share of $9.43, up 19% [26][28]. Sales and Revenue Growth - The Materials Group reported sales of $1.5 billion in 4Q24, a 4% increase, with an adjusted operating margin of 14.8% [8]. - The Solutions Group reported sales of $714 million in 4Q24, a 3% increase, with an adjusted operating margin of 11.4% [8]. - The Materials Group generated net sales of $6,013.0 million, reflecting a 3.5% increase year-over-year, while the Solutions Group saw a 7.4% increase to $2,742.7 million [26]. - Net sales for the three months ended December 28, 2024, were $2,185.7 million, an increase from $2,110.5 million for the same period in 2023, representing a growth of 3.5% [60]. - Organic sales change for the total company was 4.5% for the full year 2024, with the Materials Group at 3.7% and the Solutions Group at 6.1% [69]. Guidance and Future Expectations - The company expects FY25 reported EPS guidance of $9.55 to $9.95, and adjusted EPS guidance of $9.80 to $10.20 [15]. Cash Flow and Shareholder Returns - The company returned $525 million to shareholders in 2024 through dividends and share repurchases, including $210 million in 4Q24 [11]. - The company reported adjusted free cash flow of $699.5 million for 2024, compared to $591.9 million in 2023 [26]. - Adjusted free cash flow for the three months ended December 28, 2024, was $279.5 million, compared to $218.3 million for the same period in 2023, marking an increase of 28.0% [57]. Operating Income and Margins - Adjusted operating income for 2024 was $1,122.1 million, up 16% from $963.8 million in 2023, with adjusted operating margins increasing to 12.8% from 11.5% [26]. - Adjusted operating income for the twelve months ended December 28, 2024, was $1,122.1 million, compared to $963.8 million for the twelve months ended December 30, 2023, reflecting a year-over-year increase of 16.5% [53]. - Reported operating income for the Materials Group increased to $217.0 million in Q4 2024, up from $170.1 million in Q4 2023, representing a growth of 27.5% [62]. - Adjusted operating income for the Solutions Group was $81.2 million in Q4 2024, slightly up from $80.5 million in Q4 2023, indicating a growth of 0.9% [62]. Debt and Financial Position - The net debt to adjusted EBITDA ratio was 2.0x at the end of 4Q24, indicating a strong balance sheet [12]. - The company's net debt stood at $2,823.1 million, with a net debt to adjusted EBITDA ratio of 2.0 as of Q4 2024 [65]. - The company reported a total debt of $3,152.2 million, with cash and cash equivalents of $329.1 million [65]. - Cash and cash equivalents increased to $329.1 million at the end of 2024, compared to $215.0 million at the end of 2023 [34]. - Total assets grew to $8,405.1 million in 2024, up from $8,209.8 million in 2023 [32]. - The company’s total current liabilities increased to $2,862.6 million in 2024, compared to $2,699.5 million in 2023 [32]. Efficiency and Profitability - Adjusted EBITDA for the year was $1,434.3 million, a 14% increase from $1,262.2 million in 2023, with adjusted EBITDA margins rising to 16.4% [26]. - Adjusted EBITDA for the twelve months ended December 28, 2024, reached $1,434.3 million, up from $1,262.2 million in the previous year, indicating a growth of 13.6% [53]. - The adjusted operating margin for the three months ended December 28, 2024, was 12.8%, compared to 12.4% for the same period in 2023, showing an improvement of 0.4 percentage points [53]. - The company reported an adjusted EBITDA margin of 16.4% for the three months ended December 28, 2024, compared to 16.0% for the same period in 2023, reflecting a 0.4 percentage point increase [53]. - The income before taxes as a percentage of net sales for the three months ended December 28, 2024, was 11.0%, up from 9.6% for the same period in 2023, indicating a significant improvement in profitability [53]. Currency Impact - The company experienced a foreign currency translation impact of (0.1%) on reported net sales change in Q4 2024 [68].

Core Viewpoint - Avery Dennison Corporation (AVY) is set to report its fourth-quarter 2024 results on January 30, 2025, with expectations of revenue growth and earnings performance influenced by various factors [1][6]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for AVY's fourth-quarter revenues is $2.20 billion, reflecting a 4.2% increase from the previous year [2]. - The consensus estimate for AVY's earnings per share (EPS) is $2.37, indicating a year-over-year growth of 9.7% [2]. Earnings Surprise History - Avery Dennison has consistently beaten the Zacks Consensus Estimates in the last four quarters, with an average surprise of 3.74% [3][4]. Earnings Prediction Model - The current model indicates a negative Earnings ESP of -1.35%, suggesting that an earnings beat is not conclusively predicted for this quarter [5]. - AVY currently holds a Zacks Rank of 4 (Sell), which may impact investor sentiment [6]. Segment Performance Expectations - The Materials Group segment is expected to see revenues rise by 4.2% year-over-year to $1.48 billion, driven by higher volumes of Label Materials, which constitute approximately 74% of the segment's revenues [7]. - The Solutions Group segment's sales are projected to reach $734.8 million, marking a 6.2% increase from the prior year, supported by normalized growth in apparel and increased adoption of Intelligent Labels [8]. Stock Performance - Over the past year, AVY shares have decreased by 5.3%, while the industry has seen a decline of 9.4% [9].

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform in the next 30 days [3][4] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [4] Categories of Style Scores - **Value Score**: Focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [5] - **Growth Score**: Evaluates a company's financial health and future growth potential based on earnings and sales projections [6] - **Momentum Score**: Assesses stocks based on price trends and earnings estimate changes to identify optimal buying opportunities [7] - **VGM Score**: Combines the three Style Scores to highlight stocks with attractive value, growth, and momentum [8] Zacks Rank and Style Scores - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in stock selection [9] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [10] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [11][13] Stock Highlight: Avery Dennison (AVY) - Avery Dennison Corporation, based in Pasadena, CA, specializes in pressure-sensitive materials and various converted products, serving a global clientele [14] - Currently rated 3 (Hold) with a VGM Score of A, AVY has a Momentum Style Score of B and has seen a 0.3% increase in shares over the past four weeks [15] - Recent earnings estimates for fiscal 2024 have been revised upward, with the Zacks Consensus Estimate increasing by $0.01 to $9.42 per share, and an average earnings surprise of 3.7% [15][16]

Core Viewpoint - Avery Dennison (AVY) has experienced a bearish trend with a 6.8% stock price decline over the past four weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1] Group 1: Technical Analysis - The hammer chart pattern indicates a possible bottom formation, suggesting that selling pressure may be exhausting [1] - A hammer pattern typically forms during a downtrend when the stock opens lower, makes a new low, but then closes near its opening price, signaling a potential loss of control by bears [2] - Hammer candles can appear on various timeframes and should be used alongside other bullish indicators for confirmation [2] Group 2: Fundamental Analysis - Recent upward revisions in earnings estimates for AVY serve as a bullish indicator, correlating strongly with near-term stock price movements [3] - The consensus EPS estimate for the current year has increased by 0.1% over the last 30 days, indicating analysts' agreement on improved earnings potential [3] - Avery Dennison holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [3]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.33, a 9% increase compared to the prior year, driven by higher volume and productivity [11] - Sales increased by 5% excluding currency effects and 4% on an organic basis, with adjusted EBITDA margin at 16.4%, up 40 basis points year-over-year [11][12] - Free cash flow was strong at $420 million for the first three quarters, up nearly $50 million from the previous year, with a net debt to adjusted EBITDA ratio of 2.1 [11][12] Business Line Data and Key Metrics Changes - **Materials Group**: Sales were up 4% excluding currency and on an organic basis, with mid-single-digit volume growth offset by deflation-related price reductions [12][13] - **Solutions Group**: Sales increased by 6% on an organic basis and 7% excluding currency, with base solutions up mid-teens and high-value solutions up low-single digits [14][15] Market Data and Key Metrics Changes - In North America and Asia, volume increased compared to the prior year, while Europe saw slightly below expectations due to normal seasonality [4][12] - The macro retail environment remains soft, particularly in developed regions, as inflation continues to impact consumer behavior [4][5] Company Strategy and Development Direction - The company is focused on expanding its Intelligent Labels platform, targeting over 15% sales growth in the long term, with significant opportunities in food, logistics, and general retail [6][7] - A strategic collaboration with Kroger aims to enhance customer experience through RFID technology, starting in the bakery department [7][28] Management's Comments on Operating Environment and Future Outlook - Management raised full-year earnings guidance to $9.35 to $9.50 per share, anticipating nearly 20% growth compared to the prior year [10][16] - The company remains cautious about the uncertain macro environment, particularly in Europe, but is confident in its long-term growth strategies [10][22] Other Important Information - The company continues to execute a disciplined capital allocation strategy, returning $315 million to shareholders through share repurchases and dividends in the first nine months of the year [11][12] - The company expects to maintain stable raw material costs in the fourth quarter after addressing recent inflation through pricing actions [13] Q&A Session Summary Question: On the Materials segment and volume rebound in 2024 - Management noted that materials volumes, particularly in Europe, are experiencing seasonal slowing, with price reductions impacting sales compared to 2022 [20][21] Question: Scale of the Kroger opportunity - The Kroger collaboration is expected to expand beyond bakery into other food categories over time, with significant growth potential in the food segment [28][29] Question: Vestcom's slowdown and its impact on earnings - The slowdown in Vestcom was attributed to drugstore channel softness and external factors like hurricane-related price freezes, but growth is expected to resume [33][34] Question: Intelligent Labels growth in Q3 - Intelligent Labels growth was adjusted to mid-teens year-to-date, with expectations for continued growth despite some softness in logistics [36][37] Question: Pricing trends in the third quarter - Management indicated low single-digit inflation in raw materials, with stable pricing expected moving forward [54]

Core Viewpoint - Avery Dennison Corporation (AVY) reported strong third-quarter 2024 adjusted earnings of $2.33 per share, slightly exceeding expectations, with a year-over-year increase of 9% driven by higher volume and productivity gains [1][2]. Financial Performance - Total revenues for the third quarter grew 4.1% year over year to $2.18 billion, which was below the Zacks Consensus Estimate of $2.2 billion [2]. - The cost of sales increased by 2.9% year over year to $1.56 billion, while gross profit improved by 7% to $627 million [2]. - Marketing, general, and administrative expenses rose to $347 million from $325 million in the prior year [2]. - Adjusted operating profit was approximately $280 million, up from $261 million in the previous year, resulting in an adjusted operating margin of 12.8%, compared to 12.4% a year ago [2]. Segment Performance - Revenues in the Materials Group segment increased by 3% year over year to around $1.5 billion, with organic sales rising by 3.6% [3]. - The adjusted operating profit for the Materials Group grew by 3% year over year to $222 million [3]. - Revenues in the Solutions Group rose by 7% year over year to $686 million, with organic sales growth of 6% [3]. - The adjusted operating income for the Solutions Group increased by 26% year over year to $77 million [3]. Cash and Debt Position - The company returned $315 million to shareholders through share repurchases and dividends in the first nine months of 2024, repurchasing 0.5 million shares [4]. - Cash and cash equivalents at the end of the quarter were $213 million, slightly up from $210 million a year ago [4]. - Long-term debt decreased to $2.04 billion from $2.6 billion at the end of the third quarter of 2023 [4]. Guidance and Projections - Avery Dennison revised its guidance for 2024, expecting reported sales growth in the range of 5.0-5.5%, up from the previous 4.5-5.5% [4]. - The company anticipates organic sales growth between 4.5-5.0%, an increase from the prior range of 4.0-5.0% [4]. - Full-year adjusted EPS is projected to be in the range of $9.35-$9.50, reflecting a 19% growth from adjusted EPS of $7.90 in 2023 [5]. Stock Performance - Avery Dennison's shares have increased by 25% over the past year, outperforming the industry growth of 17.1% [6].

Core Insights - Avery Dennison reported $2.18 billion in revenue for Q3 2024, a year-over-year increase of 4.1% [1] - The EPS for the quarter was $2.33, up from $2.10 a year ago, with a surprise of +0.43% compared to the consensus estimate of $2.32 [1] - The revenue fell slightly short of the Zacks Consensus Estimate of $2.2 billion, resulting in a surprise of -0.55% [1] Financial Performance Metrics - Net Sales for the Solutions Group were $685.70 million, compared to the two-analyst average estimate of $694.69 million, reflecting a year-over-year change of +6.8% [2] - Net Sales for the Materials Group were $1.50 billion, matching the two-analyst average estimate, with a year-over-year change of +2.9% [2] - Adjusted Operating income for Corporate expense was -$19.90 million, better than the two-analyst average estimate of -$22.02 million [2] - Adjusted Operating income for the Solutions Group was $77.40 million, exceeding the two-analyst average estimate of $74.24 million [2] - Adjusted Operating income for the Materials Group was $222.20 million, slightly below the average estimate of $222.94 million [2] Stock Performance - Avery Dennison's shares have returned -2.8% over the past month, while the Zacks S&P 500 composite has increased by +2.7% [2] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [2]

Company Performance - Avery Dennison reported quarterly earnings of $2.33 per share, exceeding the Zacks Consensus Estimate of $2.32 per share, and up from $2.10 per share a year ago, representing an earnings surprise of 0.43% [1] - The company posted revenues of $2.18 billion for the quarter ended September 2024, which missed the Zacks Consensus Estimate by 0.55%, compared to $2.1 billion in the same quarter last year [1] - Over the last four quarters, Avery Dennison has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [1] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.38 on revenues of $2.19 billion, and for the current fiscal year, it is $9.46 on revenues of $8.79 billion [4] - The estimate revisions trend for Avery Dennison is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [4] Industry Context - The Office Supplies industry, to which Avery Dennison belongs, is currently in the bottom 25% of the Zacks Industry Rank, which may negatively impact stock performance [5] - Xerox Holdings Corporation, another company in the same industry, is expected to report quarterly earnings of $0.53 per share, reflecting a year-over-year change of +15.2%, with revenues anticipated to be $1.6 billion, down 3.4% from the previous year [5]