Avery Dennison outlines 6% Q1 2026 EPS growth target as high-value category mix accelerates
View original at seekingalpha.comAvery Dennison outlines 6% Q1 2026 EPS growth target as high-value category mix accelerates Earnings Call Insights: Avery Dennison Corporation (AVY) Q4 2025 MANAGEMENT VIEW * Deon Stander, President, CEO & Director, stated the company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025,…
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Q4 delivered solid adjusted earnings per share of $2.45, up 3% compared to prior year
80% confidenceRestructuring benefits expected to be somewhat balanced across the year
80% confidenceContinue to drive ongoing productivity all the time in terms of ELS savings, looking at reducing scrap, being more efficient in operations
80% confidencePricing typically follows raw material input cost changes, with productivity actions aimed at offsetting wage inflation
80% confidenceHigh-value categories now represent 38% of the Materials Group portfolio
80% confidenceExpect restructuring savings of approximately $50 million as company continues to execute productivity playbook, and expect normalization of majority of 2025 temporary savings
80% confidenceAnticipating Intelligent Labels growth rate in 2026 to be above what was delivered in 2025, expects high-value categories to grow at mid-single-digit plus
80% confidenceOngoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation
80% confidenceThe company continues to drive ongoing productivity through ELS savings, reducing scrap, and being more efficient in operations
80% confidenceIn the fourth quarter, delivered solid adjusted earnings per share of $2.45, up 3% compared to prior year
80% confidenceSolutions Group reported 1.5% sales increase, with high-value categories making up 60% of the portfolio and Vestcom growing over 10%
80% confidenceThe temporary savings headwind is on an order of magnitude basis probably pretty similar to the size of the restructuring actions, that $50 million
80% confidenceDoes not anticipate an increase in customer acquisition costs and feels confident in the company's paper supply risk management
80% confidenceI'm not happy with the way our organic growth trajectory has been over the last couple of years
80% confidenceHigh-value categories in Solutions Group make up 60% of the portfolio
80% confidenceOngoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation, strengthen service and quality, shorten innovation cycles and provide more data-driven solutions
80% confidenceThe company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025
80% confidenceHigh-value categories are a number of points above average margin, significantly above the base categories as well
80% confidenceRestructuring benefits expected to be somewhat balanced across the year
80% confidenceOngoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation, strengthen service and quality, shorten innovation cycles and provide more data-driven solutions
80% confidenceThe temporary savings headwind is on an order of magnitude basis probably pretty similar to the size of the restructuring actions, that $50 million
80% confidenceGiven key economic indicators remain largely consistent with 2025 levels, not planning for any macroeconomic tailwinds in the near term
80% confidenceHigh-value categories expected to grow at mid-single-digit plus
80% confidenceHigh-value categories are a number of points above our average margin, certainly significantly above the base categories as well
80% confidenceApparel business saw a 7% decline, greater than anticipated, primarily due to changes in retailer ordering behavior amid tariff uncertainty
80% confidenceCompliance enforcement in general retail expected to provide a tailwind
80% confidencePricing typically follows raw material input cost changes, with productivity actions aimed at offsetting wage inflation
80% confidenceCompliance enforcement in general retail is expected to provide a tailwind, and the company is expanding logistics pilots with new customers
80% confidenceBase volumes were a bit soft in the quarter
80% confidenceWe continue to drive ongoing productivity all the time in terms of ELS savings, looking at reducing scrap, being more efficient in our operations
80% confidence