Avery Dennison Corporation (AVY - Free Report) delivered adjusted earnings of $2.64 per share, beating the Zacks Consensus Estimate of $2.39 in second-quarter 2022. The bottom line marked a 17% improvement year over year.
Including one-time items, the company reported earnings per share (EPS) of $2.61 compared with the year-ago quarter’s $2.19 per share.
Total revenues increased 11.7% year over year to $2,347 million, beating the Zacks Consensus Estimate of $2,328 million.
Cost of sales in the quarter rose 11.7% year over year to $1,703.5 million. The gross profit rose 11.7% year over year to $643.5 million.
Marketing, general and administrative expenses were $332.7 million compared with the $307 million incurred in the year-ago quarter. The adjusted operating profit amounted to around $310.8 million compared with the prior-year quarter’s $269.3 million. The adjusted operating margin was 13.2% in the quarter compared with the year-ago quarter’s 12.8%.
Segment Highlights
Revenues in the Label and Graphic Materials (LGM) segment increased 8.4% year over year to $1,491.8 million in the reported quarter. On an organic basis, reported sales were up 14.5%. Label and Packaging Materials sales were up high teens on an organic basis with strong growth in high-value product categories and the base business. Sales decreased by mid-single digits organically in the combined Graphics and Reflective Solutions businesses. The segment’s adjusted operating profit increased 14% year on year to $226.3 million.
Revenues in the Retail Branding and Information Solutions (RBIS) segment rose 24.2% year over year to $657.5 million. On an organic basis, sales were up 4.5%, reflecting solid growth in the high-value product categories. The segment’s adjusted operating income was $85.9 million compared with the year-ago quarter’s $69.61 million.
Net sales in the Industrial and Healthcare Materials (IHM) segment totaled $197.7 million, up 0.6% from $196.5 million recorded in the prior-year quarter. The improvement was driven by a mid-single digit increase in industrial categories and a high teens increase in healthcare categories. The segment reported an adjusted operating income of $20.45 million compared with the prior-year quarter’s $23 million.
Financial Updates
The company returned $386 million in cash to shareholders through share repurchases and dividend payments in the first half of 2022.
Avery Dennison ended the second quarter with cash and cash equivalents of $164.8 million compared with $344.8 million at the end of the prior-year quarter. The company’s long term debt increased to $2,493.4 million from $2,020.2 million in the prior-year quarter. The company’s net debt to adjusted EBITDA ratio was 2.2.
Guidance
Avery Dennison now expects adjusted EPS guidance for 2022 in the band of $9.70-$10.00, up from the prior guidance of $9.45-$9.85.
Price Performance
Shares of Avery Dennison have declined 18.2% in the past year compared with the industry’s fall of 16.1%.
Zacks Rank and Stocks to Consider
Avery Dennison currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Greif Inc. (GEF - Free Report) , Titan International and Valmont Industries (VMI - Free Report) . While GEF and TWI sport a Zacks Rank #1 (Strong Buy), VMI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Greif has an estimated earnings growth rate of 37% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 17%.
Greif pulled off a trailing four-quarter earnings surprise of 22.9%, on average. GEF’s shares have risen 12.6% in the past year.
Titan International has an estimated earnings growth rate of 165% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 43%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. TWI’s shares have surged 102.7% in a year.
Valmont Industries has an expected earnings growth rate of around 27% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 4% in the past 60 days.
Valmont Industries has a trailing four-quarter earnings surprise of 13.7%, on average. VMI’s shares have gained 10% in the past year.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
Avery Dennison Corporation (AVY - Free Report) delivered adjusted earnings of $2.64 per share, beating the Zacks Consensus Estimate of $2.39 in second-quarter 2022. The bottom line marked a 17% improvement year over year.
Including one-time items, the company reported earnings per share (EPS) of $2.61 compared with the year-ago quarter’s $2.19 per share.
Total revenues increased 11.7% year over year to $2,347 million, beating the Zacks Consensus Estimate of $2,328 million.
Cost of sales in the quarter rose 11.7% year over year to $1,703.5 million. The gross profit rose 11.7% year over year to $643.5 million.
Marketing, general and administrative expenses were $332.7 million compared with the $307 million incurred in the year-ago quarter. The adjusted operating profit amounted to around $310.8 million compared with the prior-year quarter’s $269.3 million. The adjusted operating margin was 13.2% in the quarter compared with the year-ago quarter’s 12.8%.
Segment Highlights
Revenues in the Label and Graphic Materials (LGM) segment increased 8.4% year over year to $1,491.8 million in the reported quarter. On an organic basis, reported sales were up 14.5%. Label and Packaging Materials sales were up high teens on an organic basis with strong growth in high-value product categories and the base business. Sales decreased by mid-single digits organically in the combined Graphics and Reflective Solutions businesses. The segment’s adjusted operating profit increased 14% year on year to $226.3 million.
Revenues in the Retail Branding and Information Solutions (RBIS) segment rose 24.2% year over year to $657.5 million. On an organic basis, sales were up 4.5%, reflecting solid growth in the high-value product categories. The segment’s adjusted operating income was $85.9 million compared with the year-ago quarter’s $69.61 million.
Net sales in the Industrial and Healthcare Materials (IHM) segment totaled $197.7 million, up 0.6% from $196.5 million recorded in the prior-year quarter. The improvement was driven by a mid-single digit increase in industrial categories and a high teens increase in healthcare categories. The segment reported an adjusted operating income of $20.45 million compared with the prior-year quarter’s $23 million.
Financial Updates
The company returned $386 million in cash to shareholders through share repurchases and dividend payments in the first half of 2022.
Avery Dennison ended the second quarter with cash and cash equivalents of $164.8 million compared with $344.8 million at the end of the prior-year quarter. The company’s long term debt increased to $2,493.4 million from $2,020.2 million in the prior-year quarter. The company’s net debt to adjusted EBITDA ratio was 2.2.
Guidance
Avery Dennison now expects adjusted EPS guidance for 2022 in the band of $9.70-$10.00, up from the prior guidance of $9.45-$9.85.
Price Performance
Shares of Avery Dennison have declined 18.2% in the past year compared with the industry’s fall of 16.1%.
Zacks Rank and Stocks to Consider
Avery Dennison currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Greif Inc. (GEF - Free Report) , Titan International and Valmont Industries (VMI - Free Report) . While GEF and TWI sport a Zacks Rank #1 (Strong Buy), VMI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Greif has an estimated earnings growth rate of 37% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 17%.
Greif pulled off a trailing four-quarter earnings surprise of 22.9%, on average. GEF’s shares have risen 12.6% in the past year.
Titan International has an estimated earnings growth rate of 165% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 43%.
Titan International pulled off a trailing four-quarter earnings surprise of 56.4%, on average. TWI’s shares have surged 102.7% in a year.
Valmont Industries has an expected earnings growth rate of around 27% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 4% in the past 60 days.
Valmont Industries has a trailing four-quarter earnings surprise of 13.7%, on average. VMI’s shares have gained 10% in the past year.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
Get the latest research report on VMI - FREE
Get the latest research report on AVY - FREE
Get the latest research report on TWI - FREE
Get the latest research report on GEF - FREE