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• Adjusted Earnings Per Share (EPS): $2.30, up 4% excluding currency translation compared to prior year.

• Organic Sales Growth: Up 2%, driven by higher volume and partially offset by deflation-related price reductions.

• Adjusted EBITDA Margin: 16.4%, up 10 basis points compared to prior year.

• Free Cash Flow: Approximately negative $50 million, in line with expectations.

• Net Debt to Adjusted EBITDA Ratio: 2.3 at quarter end.

• Shareholder Returns: $331 million returned through share repurchases and dividends, reducing share count by 2.3 million shares.

• Materials Group Sales: Up 1% ex-currency and on an organic basis.

• Solutions Group Sales: Up 5% on an organic basis.

• Enterprise-wide Intelligent Labels Sales: Up mid-single digits in the first quarter.

• Materials Group Adjusted EBITDA Margin: 17.7%, down 60 basis points compared to prior year.

• Solutions Group Adjusted EBITDA Margin: 17.2%, up 110 basis points compared to prior year.

• Second Quarter EPS Guidance: Expected to be in the range of $2.30 to $2.50.

• Currency Translation Impact: Anticipated $7 million headwind to operating income for the full year.

• Restructuring Savings: Expected to be more than $45 million for the full year.

• Warning! GuruFocus has detected 2 Warning Sign with AVY.

Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Avery Dennison Corp (NYSE:AVY) delivered a strong first quarter with earnings per share up 4% ex-currency, in line with expectations.

• The company experienced strong growth in high-value categories, particularly in graphics, reflective solutions, and industrial tapes.

• The Solutions Group saw strong top-line growth and margin expansion, driven by growth in the base business and high-value solutions.

• Enterprise-wide Intelligent Labels grew mid-single digits on an organic basis, with strong growth in apparel and food categories.

• Avery Dennison Corp (NYSE:AVY) maintains a strong balance sheet with a net debt to adjusted EBITDA ratio of 2.3, providing investment flexibility.

Negative Points

• Macro uncertainty is elevated due to an evolving trade policy environment and reduced global GDP growth outlooks.

• The company faces potential impacts from recent tariff changes, which could affect material purchases and macro demand.

• Apparel growth is expected to decline mid-single digits in the second quarter due to tariff-related sourcing and pricing challenges.

• Free cash flow was negative $50 million in the first quarter, in line with historical patterns but still a concern.

• The logistics segment experienced a decline, partially offsetting growth in other areas, and no large-scale rollouts are expected in 2025.