Avery Dennison Corporation has announced preliminary, unaudited results for its first quarter ended March 29, 2025. Non-GAAP financial measures referenced in this release are reconciled from GAAP in the attached financial schedules. Unless otherwise indicated, comparisons are to the same period in the prior year.
“We delivered a strong first quarter, in-line with expectations,” said Deon Stander, president and CEO. “Both our Materials and Solutions Groups achieved strong results in a dynamic environment.
“We have a proven track record of delivering strong results across cycles, due to the strength of our overall franchise,” added Stander. “While uncertainty is elevated, we are prepared for multiple scenarios as we progress through the year.
“Once again, I want to thank our agile, engaged and talented team for their focus on excellence and commitment to addressing challenges at hand.”
First Quarter 2025 Results by Segment
Materials Group
- Reported sales decreased 1.1% to $1.5 billion.
- Sales up 1.2% on an organic basis
- High-value categories, including Intelligent Labels, up high single digits in total; base categories down low single digits
- Label Materials up low single digits
- Graphics and Reflectives up high single digits; Performance Tapes and Medical up mid-single digits
- Reported operating margin of 15.3%
- Adjusted operating margin (non-GAAP) of 15.6%, down 50 basis points
- Adjusted EBITDA margin (non-GAAP) of 17.7%, down 60 basis points, as benefits from productivity and higher volume were more than offset by the net impact of pricing and raw material input costs.
- Strong margin, in-line with expectations and up 70 basis points sequentially
Solutions Group
- Reported sales increased 2.0% to $668 million.
- Sales up 4.9% on an organic basis
- Sales in high-value categories, including Intelligent Labels, up low single digits
- Intelligent Labels up in apparel and food, partially offset by decline in logistics, as expected
- Vestcom sales up high single digits
- Embelex down mid-single digits
- Sales in base categories up high single digits
- Overall apparel categories up mid-single digits
- Reported operating margin of 8.7%
- Adjusted operating margin of 10.2%, up 90 basis points
- Adjusted EBITDA margin of 17.2%, up 110 basis points compared to prior year as benefits from productivity and higher volume were partially offset by growth investments.
Other
Balance Sheet and Capital Deployment
During the first quarter of 2025, Avery Dennison returned $331 million in cash to shareholders through a combination of share repurchases and dividends. The company repurchased 1.4 million shares at an aggregate cost of $262 million in the quarter. Net of dilution from long-term incentive awards, the company’s share count was down 2.3 million compared to the same time last year.
The company continues to deploy capital in a disciplined manner, executing its long-term capital allocation strategy. The company’s balance sheet remains strong. Net debt to adjusted EBITDA (non-GAAP) was 2.3x at the end of the first quarter.
Income Taxes
The company’s reported effective tax rate was 26.7% in the first quarter. The adjusted tax rate (non-GAAP) for the quarter was 26.0%.
Cost Reduction Actions
In the first quarter, the Avery Dennison realized approximately $14 million in pre-tax savings from restructuring, net of transition costs, and incurred approximately $5 million in pre-tax restructuring charges.
Guidance
In its supplemental presentation materials, “First Quarter 2025 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its financial results. Based on the factors listed and other assumptions, the company expects second quarter 2025 reported earnings per share of $2.25 to $2.45.
Excluding an estimated ~$0.05 per share impact of restructuring charges and other items, the company expects second quarter 2025 adjusted earnings per share of $2.30 to $2.50.
For more details on the company’s results, see the summary tables accompanying this news release, as well as the supplemental presentation materials, “First Quarter 2025 Financial Review and Analysis,” posted on the company’s website at www.investors.averydennison.com, and furnished to the SEC on Form 8-K.
Throughout this release and the supplemental presentation materials, amounts on a per share basis reflect fully diluted shares outstanding.