Core Viewpoint - Avery Dennison Corporation (AVY) is expected to report second-quarter 2025 results on July 22, 2025, with a consensus revenue estimate of $2.23 billion, reflecting a 0.2% decrease from the previous year [1] Financial Performance - The consensus estimate for AVY's earnings per share (EPS) is $2.38, indicating a year-over-year decline of 1.6% [2] - AVY has a history of beating earnings estimates, achieving this in three of the last four quarters, with an average surprise of 1.9% [2][3] Segment Performance - The Materials Group segment is projected to see a revenue decline of 0.3% year-over-year to $1.54 billion, with adjusted operating profit expected to fall by 0.8% to $242 million [9] - The Solutions Group segment's revenues are estimated to decrease by 0.9% to $682 million, with an operating profit decline of 0.7% to $69 million [10][11] Market Context - AVY shares have decreased by 19% over the past year, contrasting with a 5% decline in the industry [12]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Avery Dennison (AVY) due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Avery Dennison is expected to report quarterly earnings of $2.38 per share, reflecting a -1.7% change year-over-year, with revenues projected at $2.23 billion, down 0.2% from the previous year [3]. - The consensus EPS estimate has been revised down by 0.25% over the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Avery Dennison is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.42%, suggesting a bearish outlook from analysts [12]. - The stock currently holds a Zacks Rank of 3, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Avery Dennison was expected to post earnings of $2.32 per share but delivered $2.30, resulting in a surprise of -0.86% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Conclusion - Avery Dennison does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors when making decisions regarding the stock ahead of the earnings release [17].

Company Overview - Avery Dennison Corporation (NYSE: AVY) specializes in producing and selling labeling and packaging materials, including tags, adhesives, and labels [1] - The company operates through two segments: Materials Group and Solutions Group [1] - Avery Dennison has a market capitalization of approximately $5.75 billion [1] Analyst Background - The analyst has over 10 years of experience in the investment arena, starting as an analyst and progressing to a management role [1] - The analyst holds a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting [1] - Dividend investing is a personal interest of the analyst, who aims to share insights with the Seeking Alpha community [1]

Core Viewpoint - Investors in the Containers - Paper and Packaging sector should consider Amcor (AMCR) and Avery Dennison (AVY) for potential value investment opportunities [1] Group 1: Zacks Rank and Earnings Estimates - Amcor has a Zacks Rank of 2 (Buy), indicating strong earnings estimate revision trends, while Avery Dennison has a Zacks Rank of 4 (Sell) [3] - The earnings estimate revision activity for AMCR is more impressive, suggesting a better analyst outlook compared to AVY [3] Group 2: Value Metrics - Amcor's forward P/E ratio is 11.41, significantly lower than Avery Dennison's forward P/E of 18.95 [5] - Amcor has a PEG ratio of 2.29, while Avery Dennison's PEG ratio is 2.90, indicating that AMCR may be more attractive in terms of expected earnings growth [5] - Amcor's P/B ratio is 3.55, compared to Avery Dennison's P/B of 6.52, further highlighting AMCR's relative undervaluation [6] - Based on these valuation metrics, Amcor holds a Value grade of B, while Avery Dennison has a Value grade of C, suggesting that AMCR is the more favorable option for value investors [6]

Company Overview - Avery Dennison has faced challenges recently, leading to a downgrade from 'buy' to 'hold' in March of the previous year due to performance concerns [1] Industry Insights - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and the potential for value and growth in these sectors [1]

Core Viewpoint - Avery Dennison Corporation (AVY) is experiencing growth driven by productivity improvements and cost-saving measures, supported by strong demand for consumer-packaged goods and e-commerce trends [1][3][4] Group 1: Financial Performance and Growth Drivers - Approximately 40% of Avery Dennison's revenues come from labeling non-durable consumer goods, with strong demand in this sector [3] - The company expects over 15% growth for its Intelligent Labels in 2025, reflecting a robust long-term outlook [8] - The Materials Group segment is benefiting from productivity improvements and higher volume, which are expected to continue boosting margins [6][5] Group 2: Strategic Initiatives - Avery Dennison is focusing on five key priorities: driving growth in high-value product categories, enhancing profitability in base businesses, pursuing productivity improvements, maintaining disciplined capital management, and leading with environmentally responsible practices [7] - The company is executing long-term restructuring initiatives to enhance growth in its base business while reallocating resources to high-value categories [8][9] Group 3: Challenges and Concerns - The company is facing higher raw material costs, particularly in paper and energy, which are expected to impact margins [2][10] - Supply chain challenges and currency translation issues are anticipated to affect top-line growth [11] - Avery Dennison's adjusted EPS for the second quarter of 2025 is projected to be between $2.30 and $2.50, indicating a year-over-year decline at the mid-point [11] Group 4: Stock Performance - AVY shares have declined by 19.7% over the past year, compared to a 7.6% decline in the industry [12]

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]