Core Insights - The company reported adjusted earnings per share (EPS) of $2.42 in Q2 2025, reflecting a 5% sequential increase but remaining roughly flat year-over-year [4][28]. - Trade policy uncertainty negatively impacted results, particularly in the apparel and general retail categories, leading to a 6% decline in apparel sales during the quarter [2][20]. - Management expressed dissatisfaction with the current growth trajectory, especially within the Intelligent Labels (IL) platform, and anticipates continued low single-digit declines in apparel volumes for Q3 2025 [3][9]. Financial Performance - Adjusted EBITDA margin was 16.6% in Q2 2025, up 20 basis points compared to the prior year [5][29]. - Adjusted free cash flow reached nearly $190 million in Q2 2025 [5][30]. - The net debt to adjusted EBITDA ratio stood at 2.3 at the end of the quarter [5][29]. Sales and Revenue Trends - Organic sales decreased by 1% in Q2 2025 compared to the previous year, with positive volume mix offset by deflation-related price reductions [5][28]. - The Materials Group experienced a 1% organic sales decline, while high-value categories saw low single-digit growth [6][31]. - Sales in the Graphics and Reflective segment increased by high single digits year-over-year [7][32]. Segment Performance - The Solutions Group's sales were down 1% organically in Q2 2025, but outside of apparel and general retail, sales increased by low double digits [8][33]. - The Vescom segment reported a 10% sales increase due to successful program rollouts at CVS Health [8][33]. - Embellix sales declined in Q2 2025 due to lower sourcing demand and slower orders from U.S. performance brands [8][22]. Regional Performance - North America and Asia Pacific saw organic volume mix increases in the low to mid-single digits, while Europe experienced a decline in the low to mid-single digits [7][31]. - Latin America also reported low single-digit organic volume mix growth [7][31]. Guidance and Outlook - The company expects adjusted EPS for Q3 2025 to be in the range of $2.24 to $2.40, with the midpoint comparable to the prior year [9][34]. - Management anticipates a $50 million restructuring savings target for the year and expects to return to year-over-year adjusted EPS growth in Q4 2025 if macro conditions remain stable [13][36]. - The full-year outlook has been adjusted to reflect a $7 million benefit to operating income from currency translation, compared to a previous headwind projection [10][35]. Strategic Initiatives - The company confirmed its ability to mitigate tariff impacts through strategic sourcing adjustments and targeted pricing surcharges [13][18]. - New product launches in food and logistics have delivered returns on investment exceeding expectations [11][70]. - The company maintains a strong balance sheet with ample capacity for organic investment, M&A, dividends, and share buybacks [15][26]. Market Position and Competitive Landscape - The company remains a market leader in over 80% of its portfolio, with a focus on high-value categories that provide differentiated growth potential [25][72]. - Despite challenges in the apparel sector, the company sees significant growth opportunities in the Intelligent Labels market, which is projected to be an $8 billion opportunity [74]. - The competitive intensity in the industry remains balanced, with the company anticipating a slight increase in market share as it rolls out new technologies and solutions [72][73].

Core Points - The earnings conference call for Avery Dennison took place for the second quarter ended on June 28, 2025 [2] - The call included various corporate participants, including the President, CEO, and CFO [1] - Non-GAAP financial measures were referenced during the discussion, with definitions and reconciliations provided in the accompanying financial statements [4]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.42, up 5% sequentially and comparable to the prior year, with strong free cash flow of nearly $190 million in the quarter [17][18] - Adjusted EBITDA margin was strong at 16.6%, up 20 basis points compared to the prior year [18] - Sales were down 1% on an organic basis compared to the prior year, primarily due to deflation-related price reductions [17][18] Business Line Data and Key Metrics Changes - The Materials Group sales were down 1% on an organic basis, with modest volume mix growth offset by low single-digit deflation-related price reductions [19][20] - Solutions Group sales were also down 1% organically, with high-value categories up low single digits, while base solutions were down mid-single digits [22] - VESCOM, a suite of productivity solutions, was up roughly 10% in the quarter due to successful rollouts [10][22] Market Data and Key Metrics Changes - North America saw low to mid-single-digit organic volume mix growth, while Europe was down low to mid-single digits due to a strong prior year [19][20] - Apparel sales were down 6% in the quarter, with overall apparel and general retail categories experiencing reduced orders and inventory levels [8][11] - Food and logistics categories showed strong growth, with food up mid-teens collectively [11][22] Company Strategy and Development Direction - The company is taking a cautious approach to forward expectations, anticipating third-quarter earnings per share to be comparable to the prior year [13][24] - The focus remains on high-value categories and emerging markets, with a strong balance sheet allowing for organic and M&A investments [14][52] - The company is committed to improving network efficiency and expanding innovation, particularly in the Intelligent Labels platform [15][66] Management's Comments on Operating Environment and Future Outlook - Management noted that trade policy uncertainty impacted results, particularly in apparel and general retail categories [17][30] - Despite challenges, management expressed confidence in long-term earnings progression and the ability to navigate dynamic environments [15][24] - The company anticipates a return to earnings growth in the fourth quarter, assuming no significant macro shifts [25][41] Other Important Information - The company announced a 7% increase in the quarterly dividend to $0.94 per share, continuing a decade-long trend of annual growth [19] - The company returned approximately $500 million to shareholders through share repurchases and dividends in the first half of the year [18] Q&A Session Summary Question: Can you speak to whether you see pent-up demand and potential quicker turnarounds in the second half? - Management noted continued retail sales volume softness in Europe and muted customer sentiment, with expectations of low single-digit demand in apparel and general retail overall [30][31] Question: What are the expected volumes for the back half of the year? - Management reiterated that apparel business is expected to be down low single digits in Q3, with growth anticipated in Intelligent Labels in the second half [34][37] Question: What are the exit rates in your materials businesses into the third quarter? - Exit rates for the Materials Group were relatively flat overall, with slight improvements noted in June [98] Question: What is the outlook for Embellix and its reliance on global sporting events? - Management expects growth in Embellix to begin in Q4, with confidence in the long-term growth trajectory despite challenges in the apparel market [84][98] Question: How is the rollout with CVS going for VESCOM? - The rollout with CVS is progressing well, with strong growth anticipated as the company continues to leverage data for shelf-edge labeling solutions [86][87]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.42, up 5% sequentially and comparable to the prior year, with strong free cash flow of nearly $190 million in the quarter [15][16] - Adjusted EBITDA margin was strong at 16.6%, up 20 basis points compared to the prior year [16] - Sales were down 1% on an organic basis compared to the prior year, primarily due to deflation-related price reductions [15][16] Business Line Data and Key Metrics Changes - Materials Group sales were down 1% on an organic basis, with high-value categories up low single digits and base business down low single digits [18][19] - Solutions Group sales were down 1% organically, with high-value categories up low single digits and base solutions down mid single digits [21] - The Solutions Group achieved an adjusted EBITDA margin of 17.1%, up 30 basis points compared to the prior year [22] Market Data and Key Metrics Changes - North America saw low to mid single-digit growth in organic volume mix, while Europe was down low to mid single digits [19] - Apparel sales were down 6% in the quarter, with overall apparel and general retail categories experiencing reduced orders and inventory levels [6][10] - Food and logistics categories showed strong growth, with food sales up mid-teens collectively [10][21] Company Strategy and Development Direction - The company is focused on leveraging its global scale, innovation, and go-to-market strategy to maintain competitive advantages in large growing markets [12][13] - There is an emphasis on expanding high-value categories and pursuing new projects in food and logistics [10][12] - The company plans to continue disciplined capital allocation, including share repurchases and dividends, while exploring M&A opportunities to enhance high-value category contributions [52][54] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the third quarter, expecting earnings per share to be comparable to the prior year amid trade policy uncertainties [12][15] - The company anticipates a normalization of growth in apparel and general retail categories over time, despite current softness [10][11] - Management remains confident in the long-term growth trajectory, particularly in high-value categories and emerging markets [13][72] Other Important Information - The company announced a 7% increase in its quarterly dividend to $0.94 per share, continuing a decade-long trend of annual dividend growth [17] - The company is actively managing its global network to reduce inefficiencies and associated costs due to shifts in trade policies [11] Q&A Session Summary Question: Can you speak to whether you see pent-up demand and potential quicker turnarounds in the second half? - Management noted continued retail sales volume softness in Europe and muted customer sentiment, with expectations of low single-digit demand in apparel and general retail overall [29][30] Question: What are your expectations for volumes in the back half of the year? - Management anticipates growth in Intelligent Labels in the third quarter and expects new programs to gain traction in the fourth quarter [38][42] Question: What impact do you expect from the closure of Kroger stores on your deployments? - Management stated that the rollout with Kroger continues as planned, with no significant impact from store closures on their deployments [78] Question: What are the expectations for growth in the Embellix business? - Management expects growth in the Embellix business to begin in the fourth quarter, driven by performance brands and upcoming sporting events [86][100] Question: How is the company managing tariff cost impacts? - Management indicated that they largely offset tariff-related costs in Q2 through strategic pricing and sourcing shifts, with expectations to continue this in Q3 [91][92]

Core Insights - Avery Dennison Corporation (AVY) reported adjusted earnings of $2.42 per share for Q2 2025, surpassing the Zacks Consensus Estimate of $2.38, with year-over-year earnings remaining flat [1][10] - Total revenues decreased by 0.7% year over year to $2.22 billion, slightly missing the Zacks Consensus Estimate of $2.23 billion [2][10] - The company expects adjusted EPS for Q3 2025 to be between $2.24 and $2.40 [8] Financial Performance - The cost of sales increased by 0.6% year over year to $1.58 billion, leading to a gross profit decline of 3.6% to $639 million [2] - Marketing, general, and administrative expenses were reduced to $352 million from $374 million in the previous year, with adjusted operating profit around $287 million, flat compared to the prior year [3] - The adjusted operating margin remained stable at 12.9% [3] Segment Performance - Revenues in the Materials Group segment rose by 0.2% year over year to $1.55 billion, exceeding estimates, but organic sales fell by 1% [4] - The Solutions Group experienced a 2.6% revenue decline year over year to $670 million, with organic sales down by 0.8% [5] Cash and Debt Position - Avery Dennison returned $503 million to shareholders through share repurchases and dividends in the first half of 2025, repurchasing 2 million shares [6] - The company ended the quarter with cash and cash equivalents of $216 million, up from $209 million a year ago, while long-term debt increased to $2.63 billion from $2.05 billion [7] Stock Performance - Avery Dennison shares have declined by 18.7% over the past year, compared to a 6.1% decline in the industry [11]

Financial Performance - The company reported net sales of $2.2 billion [16] - Organic sales decreased by 1.0% [16, 20, 29, 33] - Adjusted EPS was $2.42, comparable to the prior year [13, 16] - Adjusted EBITDA margin increased by 20 bps to 16.6% [18] - Strong adjusted free cash flow (FCF) was $189 million [17] Segment Performance - Materials Group reported sales increased 0.2% to $1.6 billion [29] - Solutions Group reported sales decreased 2.6% to $670 million [33] - High-value categories delivered sales of approximately $1.0 billion, up low single digits (LSD) organically and up mid-single digits (MSD) excluding estimated impact of tariffs [19] - Base categories delivered sales of approximately $1.2 billion, down LSD organically [19] Outlook and Strategy - The company expects adjusted EPS of $2.24 to $2.40 in Q3 2025 [14, 42] - The company anticipates slight sales growth versus the prior year [44] - The company is targeting approximately 100% adjusted FCF conversion [44]

Net Sales- Solutions Group: $670.3 million versus the three-analyst average estimate of $678.75 million. The reported number represents a year-over-year change of -2.6%. Net Sales- Materials Group: $1.55 billion versus $1.55 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +0.2% change. Adjusted Operating income (loss)- Corporate expense: $-22.8 million versus the three-analyst average estimate of $-26.36 million. Adjusted Operating income (loss)- So ...

分组1 - Avery Dennison reported quarterly earnings of $2.42 per share, exceeding the Zacks Consensus Estimate of $2.38 per share, with an earnings surprise of +1.68% [1] - The company posted revenues of $2.22 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.5%, and compared to year-ago revenues of $2.24 billion [2] - The stock has underperformed the market, losing about 4.3% since the beginning of the year, while the S&P 500 gained 7.2% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $2.37 on revenues of $2.21 billion, and for the current fiscal year, it is $9.56 on revenues of $8.83 billion [7] - The Containers - Paper and Packaging industry is currently in the top 40% of Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) Avery Dennison reported solid second-quarter results with earnings above expectations, driven by high-value categories and productivity, despite trade policy changes [Key Highlights](index=1&type=section&id=Key%20Highlights) Avery Dennison reported solid second-quarter results with earnings above expectations, driven by high-value categories and productivity, despite trade policy changes. The company also provided its third-quarter EPS guidance 2Q25 Key Financial Highlights | Metric | Value | | :-------------------------------- | :------ | | Reported EPS | $2.41 | | Adjusted EPS (non-GAAP) | $2.42 | | Net Sales | $2.2 billion | | Organic Sales Change (non-GAAP) | (1.0%) | | **3Q25 Guidance:** | | | Reported EPS Guidance | $2.14 to $2.30 | | Adjusted EPS Guidance (non-GAAP) | $2.24 to $2.40 | - Adjusted EPS (non-GAAP) of **$2.42** was up **5% sequentially** and comparable to the prior year[5](index=5&type=chunk) - Net sales of **$2.2 billion** were down **0.7% year-over-year**[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Deon Stander highlighted a solid second quarter with earnings exceeding expectations, attributing performance to portfolio strength, growth in high-value categories, and productivity offsetting tariff impacts. He emphasized preparedness for trade policy changes and a focus on profitable growth - Delivered a solid second quarter with earnings above expectations in a dynamic environment, reflecting the strength of the overall portfolio[4](index=4&type=chunk) - Growth in high-value categories and productivity in the base business offset the impact from tariffs, despite lower sourcing demand for apparel and general retail due to trade policy changes[4](index=4&type=chunk) - The company is prepared for various scenarios regarding trade policy changes and will leverage its proven playbook to safeguard earnings and drive strong profitable growth[5](index=5&type=chunk) [About Avery Dennison](index=3&type=section&id=About%20Avery%20Dennison) Avery Dennison Corporation is a global materials science and digital identification solutions company, providing branding and information solutions across various industries worldwide, with reported sales of $8.8 billion in 2024 - Avery Dennison Corporation is a global materials science and digital identification solutions company[16](index=16&type=chunk) - The company designs and develops labeling and functional materials, RFID inlays and tags, software applications, and offerings that enhance branded packaging[16](index=16&type=chunk) - Serves industries including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals, and automotive, employing approximately **35,000 employees** in over **50 countries**[16](index=16&type=chunk) - Reported sales in **2024 were $8.8 billion**[16](index=16&type=chunk) [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Avery Dennison's consolidated net sales decreased slightly by 0.7% to $2.2 billion in 2Q25, with organic sales down 1.0%. Reported net income increased by 6.9%, while adjusted net income saw a slight decrease. Reported EPS grew by 10.6%, and adjusted EPS remained flat year-over-year [Consolidated Financial Results](index=1&type=section&id=Consolidated%20Financial%20Results) Avery Dennison's consolidated net sales decreased slightly by 0.7% to $2.2 billion in 2Q25, with organic sales down 1.0%. Reported net income increased by 6.9%, while adjusted net income saw a slight decrease. Reported EPS grew by 10.6%, and adjusted EPS remained flat year-over-year 2Q25 Consolidated Financial Performance (YoY) | Metric | 2Q 2025 | 2Q 2024 | % Change (Reported) | | :--------------------------------------- | :-------- | :-------- | :------------------ | | Net Sales | $2,220.5M | $2,235.3M | (0.7%) | | Organic Sales Change (non-GAAP) | (1.0%) | N/A | N/A | | Net Income (as reported) | $189.0M | $176.8M | 6.9% | | Adjusted Net Income (non-GAAP) | $189.5M | $196.0M | (3.3%) | | Reported EPS | $2.41 | $2.18 | 10.6% | | Adjusted EPS (non-GAAP) | $2.42 | $2.42 | --- | | Adjusted Operating Income (non-GAAP) | $286.7M | $288.8M | (0.7%) | | Adjusted Operating Margin (non-GAAP) | 12.9% | 12.9% | --- | | Adjusted EBITDA (non-GAAP) | $367.5M | $367.4M | --- | | Adjusted EBITDA Margin (non-GAAP) | 16.6% | 16.4% | 20 bps | [Segment Performance](index=2&type=section&id=Segment%20Performance) The Materials Group saw a slight reported sales increase but an organic decline, with high-value categories growing modestly. The Solutions Group experienced a reported and organic sales decrease, primarily due to base and apparel categories, despite growth in some high-value areas [Materials Group](index=2&type=section&id=Materials%20Group) The Materials Group reported a slight sales increase but an organic decline, with high-value categories showing modest growth and adjusted EBITDA margin decreasing slightly Materials Group 2Q25 Performance (YoY) | Metric | 2Q 2025 | 2Q 2024 | % Change (Reported) | Organic Sales Change | | :--------------------------------------- | :-------- | :-------- | :------------------ | :------------------- | | Reported Sales | $1,550.2M | $1,546.8M | 0.2% | (1.0%) | | Reported Operating Margin | 16.1% | 14.4% | 1.7 pp | N/A | | Adjusted Operating Margin (non-GAAP) | 15.6% | 15.8% | (20 bps) | N/A | | Adjusted EBITDA Margin (non-GAAP) | 17.8% | 17.9% | (10 bps) | N/A | - High-value categories, including Intelligent Labels, were up **low single digits** in total, while base categories were down **low single digits**[8](index=8&type=chunk) - Graphics and Reflectives sales were up **high single digits**; Performance Tapes and Medical sales were up **low single digits**[8](index=8&type=chunk) - Adjusted EBITDA margin decreased by **10 basis points**, as productivity benefits and higher volume/mix were offset by the net impact of pricing and raw material input costs[8](index=8&type=chunk) [Solutions Group](index=2&type=section&id=Solutions%20Group) The Solutions Group experienced reported and organic sales decreases, primarily in base and apparel categories, despite growth in some high-value areas, with adjusted EBITDA margin increasing Solutions Group 2Q25 Performance (YoY) | Metric | 2Q 2025 | 2Q 2024 | % Change (Reported) | Organic Sales Change | | :--------------------------------------- | :-------- | :-------- | :------------------ | :------------------- | | Reported Sales | $670.3M | $688.5M | (2.6%) | (0.8%) | | Reported Operating Margin | 8.9% | 9.3% | (40 bps) | N/A | | Adjusted Operating Margin (non-GAAP) | 10.0% | 10.1% | (10 bps) | N/A | | Adjusted EBITDA Margin (non-GAAP) | 17.1% | 16.8% | 30 bps | N/A | - Sales in high-value categories, including Intelligent Labels, were up **low single digits**; excluding the estimated indirect impact of tariffs, they were up **high single digits**[8](index=8&type=chunk) - Intelligent Labels were comparable to the prior year, Vestcom was up approximately **10%**, and Embelex was down **high single digits**[8](index=8&type=chunk) - Overall apparel categories were down **mid-single digits**, and sales in base categories were down **mid-single digits**[8](index=8&type=chunk) - Adjusted EBITDA margin increased by **30 basis points**, as benefits from productivity were partially offset by lower volume in apparel and growth investments[8](index=8&type=chunk) [Financial Position & Cash Flow](index=3&type=section&id=Financial%20Position%20%26%20Cash%20Flow) Avery Dennison maintains a strong balance sheet with increased total assets and a net debt to adjusted EBITDA ratio of 2.3x, while returning $503 million to shareholders in H1 2025 [Balance Sheet Highlights](index=3&type=section&id=Balance%20Sheet%20Highlights) Avery Dennison maintains a strong balance sheet, with total assets increasing year-over-year. The net debt to adjusted EBITDA ratio stood at 2.3x at the end of the second quarter - The company's balance sheet remains strong, with net debt to adjusted EBITDA (non-GAAP) at **2.3x** at the end of the second quarter[10](index=10&type=chunk)[57](index=57&type=chunk) Balance Sheet Snapshot (YoY) | Metric | Jun. 28, 2025 | Jun. 29, 2024 | | :--------------------------------------- | :-------------- | :-------------- | | Total Assets | $8,568.2M | $8,298.2M | | Total Current Assets | $3,183.8M | $2,967.8M | | Total Current Liabilities | $3,062.1M | $3,300.2M | | Long-term debt and finance leases | $2,628.2M | $2,046.5M | [Cash Flow & Capital Deployment](index=3&type=section&id=Cash%20Flow%20%26%20Capital%20Deployment) In the first half of 2025, Avery Dennison returned $503 million to shareholders through share repurchases and dividends, including a 7% increase in the quarterly dividend. Operating cash flow decreased, while adjusted free cash flow for 2Q25 improved year-over-year - Returned **$503 million** in cash to shareholders during the first half of 2025 through share repurchases and dividends[9](index=9&type=chunk) - Repurchased **2.0 million shares** at an aggregate cost of **$360 million** in the first half of the year[9](index=9&type=chunk) - Increased its quarterly dividend to **$0.94 per share**, representing an increase of approximately **7%** over the previous rate[9](index=9&type=chunk) Cash Flow Highlights (Six Months Ended) | Metric | Jun. 28, 2025 | Jun. 29, 2024 | | :--------------------------------------- | :-------------- | :-------------- | | Net cash provided by operating activities | $192.5M | $317.5M | | Net cash used in investing activities | ($61.2M) | ($118.8M) | | Net cash used in financing activities | ($248.5M) | ($202.1M) | | Adjusted free cash flow (non-GAAP) (2Q) | $188.9M | $142.5M | [Outlook & Guidance](index=1&type=section&id=Outlook%20%26%20Guidance) Avery Dennison has issued its earnings per share guidance for the third quarter of 2025, providing both reported and adjusted figures [Third Quarter 2025 Guidance](index=1&type=section&id=Third%20Quarter%202025%20Guidance) Avery Dennison has issued its earnings per share guidance for the third quarter of 2025, providing both reported and adjusted figures 3Q25 EPS Guidance | Metric | Range | | :--------------------------------------- | :------------ | | Reported EPS Guidance | $2.14 to $2.30 | | Adjusted EPS Guidance (non-GAAP) | $2.24 to $2.40 | - The adjusted EPS guidance excludes an estimated **~$0.10 per share** impact of restructuring charges and other items[14](index=14&type=chunk) [Other Financial Information](index=3&type=section&id=Other%20Financial%20Information) This section details Avery Dennison's income tax rates, cost reduction actions, and the reconciliation of non-GAAP financial measures to GAAP results [Income Taxes](index=3&type=section&id=Income%20Taxes) The company's reported and adjusted effective tax rates for the second quarter of 2025 were both 26.0% - The reported effective tax rate for the second quarter was **26.0%**[11](index=11&type=chunk) - The adjusted tax rate (non-GAAP) for the quarter was also **26.0%**[11](index=11&type=chunk) [Cost Reduction Actions](index=3&type=section&id=Cost%20Reduction%20Actions) Avery Dennison realized pre-tax savings from restructuring efforts in the first half of 2025, while also incurring associated restructuring charges - Realized approximately **$30 million** in pre-tax savings from restructuring, net of transition costs, in the first half of 2025[12](index=12&type=chunk) - Incurred approximately **$13 million** in pre-tax restructuring charges in the first half of 2025[12](index=12&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) Avery Dennison provides non-GAAP financial measures to supplement GAAP results, aiding investors in evaluating underlying performance and comparing results. These measures exclude specific events or activities to offer a clearer view of core operations and liquidity - Non-GAAP financial measures are used to evaluate trends in underlying performance and facilitate comparisons with competitors, supplementing GAAP results[33](index=33&type=chunk) - These measures exclude the impact of certain events, activities, or strategic decisions such as restructuring charges, legal matters, strategic transactions, and currency adjustments, to provide meaningful supplemental information on core operating results and liquidity[34](index=34&type=chunk) - Key non-GAAP measures include Sales change ex. currency, Organic sales change, Adjusted operating income/margin, Adjusted EBITDA/margin, Adjusted tax rate, Adjusted net income/EPS, Net debt to adjusted EBITDA ratio, and Adjusted free cash flow, with detailed reconciliations provided[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Legal & Disclosures](index=4&type=section&id=Legal%20%26%20Disclosures) This section includes a 'Safe Harbor' statement for forward-looking statements and outlines significant risk factors impacting the company's financial performance [Safe Harbor Statement & Risk Factors](index=4&type=section&id=Safe%20Harbor%20Statement%20%26%20Risk%20Factors) The document includes a 'Safe Harbor' statement for forward-looking statements, outlining significant risk factors that could materially affect the company's financial performance, such as global economic conditions, competition, raw material costs, and foreign currency fluctuations - Certain statements are 'forward-looking statements' subject to risks and uncertainties, qualifying for the safe harbor from liability[17](index=17&type=chunk) - Significant risk factors include the impact of global economic conditions, tariffs, geopolitical uncertainty, and changes in environmental standards on demand[18](index=18&type=chunk) - Other key risks involve competitors' actions, the cost and availability of raw materials, the ability to offset higher costs, foreign currency fluctuations, and the execution and integration of acquisitions[18](index=18&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents Avery Dennison's preliminary condensed consolidated statements of income, balance sheets, and cash flows for the specified periods [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section presents the preliminary condensed consolidated statements of income for the three and six months ended June 28, 2025, and June 29, 2024, detailing revenues, expenses, and net income Preliminary Condensed Consolidated Statements of Income (In millions, except per share amounts) | Metric | Three Months Ended Jun. 28, 2025 | Three Months Ended Jun. 29, 2024 | Six Months Ended Jun. 28, 2025 | Six Months Ended Jun. 29, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net sales | $2,220.5 | $2,235.3 | $4,368.8 | $4,386.6 | | Cost of products sold | 1,581.4 | 1,572.6 | 3,108.2 | 3,091.7 | | Gross profit | 639.1 | 662.7 | 1,260.6 | 1,294.9 | | Marketing, general and administrative expense | 352.4 | 373.9 | 699.4 | 739.1 | | Income before taxes | 255.5 | 238.4 | 482.5 | 472.8 | | Provision for income taxes | 66.5 | 61.6 | 127.2 | 123.6 | | Net income | $189.0 | $176.8 | $355.3 | $349.2 | | Net income per common share, assuming dilution | $2.41 | $2.18 | $4.50 | $4.31 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the preliminary condensed consolidated balance sheets as of June 28, 2025, and June 29, 2024, detailing the company's assets, liabilities, and shareholders' equity Preliminary Condensed Consolidated Balance Sheets (In millions) | ASSETS | Jun. 28, 2025 | Jun. 29, 2024 | | :-------------------------------------------------- | :-------------- | :-------------- | | Cash and cash equivalents | $215.9 | $208.8 | | Trade accounts receivable, net | 1,626.5 | 1,528.6 | | Inventories | 1,026.9 | 979.9 | | Total current assets | 3,183.8 | 2,967.8 | | Property, plant and equipment, net | 1,604.2 | 1,590.0 | | Goodwill and other intangibles resulting from business acquisitions, net | 2,744.6 | 2,790.7 | | Total assets | $8,568.2 | $8,298.2 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Short-term borrowings and current portion of long-term debt and finance leases | $922.0 | $1,172.3 | | Accounts payable | 1,307.5 | 1,313.4 | | Total current liabilities | 3,062.1 | 3,300.2 | | Long-term debt and finance leases | 2,628.2 | 2,046.5 | | Total liabilities and shareholders' equity | $8,568.2 | $8,298.2 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the preliminary condensed consolidated statements of cash flows for the six months ended June 28, 2025, and June 29, 2024, outlining cash generated from or used in operating, investing, and financing activities Preliminary Condensed Consolidated Statements of Cash Flows (In millions) | Metric | Six Months Ended Jun. 28, 2025 | Six Months Ended Jun. 29, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $192.5 | $317.5 | | Net cash used in investing activities | ($61.2) | ($118.8) | | Net cash used in financing activities | ($248.5) | ($202.1) | | Increase (decrease) in cash and cash equivalents | ($113.2) | ($6.2) | | Cash and cash equivalents, end of period | $215.9 | $208.8 |

Core Insights - Analysts expect Avery Dennison (AVY) to report quarterly earnings of $2.38 per share, reflecting a year-over-year decline of 1.7% [1] - Projected revenues for the quarter are $2.23 billion, down 0.2% from the same period last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [1] Earnings Estimates and Revisions - Changes in earnings estimates are crucial for predicting investor reactions to the stock [2] - Empirical studies show a strong correlation between earnings estimate revisions and short-term stock price performance [2] Key Metrics Forecast - The consensus estimate for 'Net Sales- Solutions Group' is $678.75 million, indicating a decline of 1.4% year-over-year [4] - Analysts project 'Net Sales- Materials Group' to reach $1.55 billion, suggesting a year-over-year increase of 0.5% [4] - The 'Adjusted Operating income (loss)- Solutions Group' is expected to be $67.09 million, down from $69.80 million in the same quarter last year [5] - The consensus for 'Adjusted Operating income (loss)- Materials Group' is $242.79 million, compared to $244.50 million a year ago [5] Stock Performance - Over the past month, Avery Dennison shares have returned +1.8%, while the Zacks S&P 500 composite has increased by +5.4% [5] - Avery Dennison holds a Zacks Rank 3 (Hold), suggesting its performance will likely align with the overall market in the near term [5]