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Avery Dennison Corporation (AVY - Free Report) has delivered adjusted earnings of $2.10 per share in third-quarter 2023, beating the Zacks Consensus Estimate of $2.07. The bottom line, however, marked a 15% year-over-year decline.
Including one-time items, the company reported earnings per share (EPS) of $1.71 compared with the year-ago quarter’s $2.70.
Total revenues decreased 9.4% year over year to $2,098 million, and missed the Zacks Consensus Estimate of $2,124 million.
Cost of sales in the quarter dropped 10.9% year over year to $1,512.5 million. The gross profit fell 5.4% year over year to $586 million.
Marketing, general and administrative expenses were $332.6 million compared with the $330.8 million incurred in the year-ago quarter. The adjusted operating profit was around $253 million compared with the prior-year quarter’s $228 million. The adjusted operating margin was 12.1% compared with the year-ago quarter’s 12.4%.
Avery Dennison Corporation Price, Consensus and EPS Surprise
Revenues in the Materials Group segment declined 14% year over year to $1,456 million in the reported quarter. The reported figure missed our estimate of $1532 million. On an organic basis, sales were down 15.7%. We predicted organic sales to fall 8.8%. The segment’s adjusted operating profit fell 25% year over year to $176.5 million.
Revenues in the Solutions Group were up 3.1% year over year to $642 million. We estimated revenues of $591 million for this segment. On an organic basis, sales improved 0.6% year over year. Our model predicted a fall of 5.7%. The variance was driven by a sequential improvement in Apparel Solutions volume. The segment’s adjusted operating income slumped 33.1% year over year to $50.7 million.
Financial Updates
The company returned $309 million in cash to shareholders through share repurchases and dividend payments in the first nine months of 2023. AVY has also repurchased 0.7 million shares throughout the period.
Avery Dennison ended the third quarter with cash and cash equivalents of $210 million compared with $128 million at the end of the prior-year quarter. The company’s long-term debt increased to $2,598 million from $2,463 million at the end of the prior-year quarter. The company’s net debt to adjusted EBITDA ratio was 2.6.
Guidance
Avery Dennison expects a fourth-quarter 2023 adjusted EPS within the range of $2.10-$2.25.
Price Performance
Shares of AVY have declined 0.5% in the past year compared with the industry’s fall of 0.9%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Avery Dennison currently carries a Zacks Rank #3 (Hold).
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pegged at $9.13 per share, which indicates year-over-year growth of 2%. Estimates have moved up 2% in the past 60 days. The company’s shares gained 33.6% in the last year.
Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $3.24 per share, indicating year-over-year growth of 163%. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days. ASTE’s shares gained 8.2% in the last year.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $3.62. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. The company has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC rallied 18.5% in the last year.
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Avery Dennison (AVY) Q3 Earnings Beat Estimates, Dip Y/Y
Avery Dennison Corporation (AVY - Free Report) has delivered adjusted earnings of $2.10 per share in third-quarter 2023, beating the Zacks Consensus Estimate of $2.07. The bottom line, however, marked a 15% year-over-year decline.
Including one-time items, the company reported earnings per share (EPS) of $1.71 compared with the year-ago quarter’s $2.70.
Total revenues decreased 9.4% year over year to $2,098 million, and missed the Zacks Consensus Estimate of $2,124 million.
Cost of sales in the quarter dropped 10.9% year over year to $1,512.5 million. The gross profit fell 5.4% year over year to $586 million.
Marketing, general and administrative expenses were $332.6 million compared with the $330.8 million incurred in the year-ago quarter. The adjusted operating profit was around $253 million compared with the prior-year quarter’s $228 million. The adjusted operating margin was 12.1% compared with the year-ago quarter’s 12.4%.
Avery Dennison Corporation Price, Consensus and EPS Surprise
Avery Dennison Corporation price-consensus-eps-surprise-chart | Avery Dennison Corporation Quote
Segment Highlights
Revenues in the Materials Group segment declined 14% year over year to $1,456 million in the reported quarter. The reported figure missed our estimate of $1532 million. On an organic basis, sales were down 15.7%. We predicted organic sales to fall 8.8%. The segment’s adjusted operating profit fell 25% year over year to $176.5 million.
Revenues in the Solutions Group were up 3.1% year over year to $642 million. We estimated revenues of $591 million for this segment. On an organic basis, sales improved 0.6% year over year. Our model predicted a fall of 5.7%. The variance was driven by a sequential improvement in Apparel Solutions volume. The segment’s adjusted operating income slumped 33.1% year over year to $50.7 million.
Financial Updates
The company returned $309 million in cash to shareholders through share repurchases and dividend payments in the first nine months of 2023. AVY has also repurchased 0.7 million shares throughout the period.
Avery Dennison ended the third quarter with cash and cash equivalents of $210 million compared with $128 million at the end of the prior-year quarter. The company’s long-term debt increased to $2,598 million from $2,463 million at the end of the prior-year quarter. The company’s net debt to adjusted EBITDA ratio was 2.6.
Guidance
Avery Dennison expects a fourth-quarter 2023 adjusted EPS within the range of $2.10-$2.25.
Price Performance
Shares of AVY have declined 0.5% in the past year compared with the industry’s fall of 0.9%.
Image Source: Zacks Investment Research
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 Applied Industrial Technologies (AIT - Free Report) , Astec Industries, Inc. (ASTE - Free Report) and Brady (BRC - Free Report) . All these companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pegged at $9.13 per share, which indicates year-over-year growth of 2%. Estimates have moved up 2% in the past 60 days. The company’s shares gained 33.6% in the last year.
Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $3.24 per share, indicating year-over-year growth of 163%. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days. ASTE’s shares gained 8.2% in the last year.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $3.62. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. The company has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC rallied 18.5% in the last year.