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Avery Dennison Corporation (AVY - Free Report) has delivered adjusted earnings of $2.16 per share in fourth-quarter 2023, beating the Zacks Consensus Estimate of $2.15. The bottom line increased 31% year-over-year.
Including one-time items, the company has reported earnings per share (EPS) of $1.77 compared with the year-ago quarter’s $1.51.
Total revenues moved up 4.2% year over year to $2.11 billion, beating the Zacks Consensus Estimate of $2.09 billion. Volumes in both segments were up sequentially.
Avery Dennison Corporation Price, Consensus and EPS Surprise
The cost of sales in the quarter dipped 0.7% year over year to $1.51 billion . The gross profit rose 19.2% year over year to $596 million.
Marketing, general and administrative expenses were $335 million compared with the $312 million incurred in the year-ago quarter. The adjusted operating profit was around $261 million compared with the prior-year quarter’s $188 million. The adjusted operating margin was 12.4% compared with 9.3% in the prior-year quarter.
Segmental Highlights
Revenues in the Materials Group segment declined 1.6% year over year to $1.42 billion in the reported quarter. The reported figure missed our estimate of $1.49 billion . On an organic basis, sales were down 3.9%. We predicted organic sales to rise 1.2%. The segment’s adjusted operating profit increased 31.9% year over year to $198 million.
Revenues in the Solutions Group were up 18.3% year over year to $692 million. We estimated revenues of $605 million for this segment. On an organic basis, sales improved 13.9% year over year. Our model predicted a rise of 0.9%. The variance was driven by a sequential improvement in Apparel Solutions volume. The segment’s adjusted operating income rose 51.6% year over year to $80.5 million.
Financial Updates
The company returned $394 million in cash to shareholders through share repurchases and dividend payments in 2023. AVY repurchased 0.8 million shares throughout the year.
Avery Dennison ended 2023 with cash and cash equivalents of $215 million compared with $167 million at the end of the prior year.
The company’s long-term debt was $2.62 billion at the end of 2023, up from $2.50 billion at the end of 2022. The company’s net debt to adjusted EBITDA ratio was 2.4X.
AVY realized approximately $69 million in pre-tax savings from restructuring (net of transition costs) in 2023. The company also incurred pre-tax restructuring charges of around $79 million.
2023 Performance
Adjusted EPS decreased 14% year over year to $7.90 in 2023 but topped the Zacks Consensus Estimate of $7.87. Including one-time items, EPS was $6.20 in 2023, down 33% from the $9.21 reported in 2022.
Total revenues declined 7.5% year over year to $8.36 billion. The top line figure topped the Zacks Consensus Estimate of $8.34 billion.
Guidance for 2024
Avery Dennison expects adjusted EPS between $9.00 and $9.50 for 2024.
Price Performance
Shares of AVY have gained 6.8% in the past year compared with the industry’s growth of 15%.
Image Source: Zacks Investment Research
Zacks Rank and Other Stocks to Consider
Avery Dennison currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 51.8% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 26.1% in a year.
The Zacks Consensus Estimate for A. O. Smith’s 2024 earnings is pegged at $4.03 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 6.8%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 16% in the past year.
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Avery Dennison (AVY) Q4 Earnings Beat Estimates, Rise Y/Y
Avery Dennison Corporation (AVY - Free Report) has delivered adjusted earnings of $2.16 per share in fourth-quarter 2023, beating the Zacks Consensus Estimate of $2.15. The bottom line increased 31% year-over-year.
Including one-time items, the company has reported earnings per share (EPS) of $1.77 compared with the year-ago quarter’s $1.51.
Total revenues moved up 4.2% year over year to $2.11 billion, beating the Zacks Consensus Estimate of $2.09 billion. Volumes in both segments were up sequentially.
Avery Dennison Corporation Price, Consensus and EPS Surprise
Avery Dennison Corporation price-consensus-eps-surprise-chart | Avery Dennison Corporation Quote
The cost of sales in the quarter dipped 0.7% year over year to $1.51 billion . The gross profit rose 19.2% year over year to $596 million.
Marketing, general and administrative expenses were $335 million compared with the $312 million incurred in the year-ago quarter. The adjusted operating profit was around $261 million compared with the prior-year quarter’s $188 million. The adjusted operating margin was 12.4% compared with 9.3% in the prior-year quarter.
Segmental Highlights
Revenues in the Materials Group segment declined 1.6% year over year to $1.42 billion in the reported quarter. The reported figure missed our estimate of $1.49 billion . On an organic basis, sales were down 3.9%. We predicted organic sales to rise 1.2%. The segment’s adjusted operating profit increased 31.9% year over year to $198 million.
Revenues in the Solutions Group were up 18.3% year over year to $692 million. We estimated revenues of $605 million for this segment. On an organic basis, sales improved 13.9% year over year. Our model predicted a rise of 0.9%. The variance was driven by a sequential improvement in Apparel Solutions volume. The segment’s adjusted operating income rose 51.6% year over year to $80.5 million.
Financial Updates
The company returned $394 million in cash to shareholders through share repurchases and dividend payments in 2023. AVY repurchased 0.8 million shares throughout the year.
Avery Dennison ended 2023 with cash and cash equivalents of $215 million compared with $167 million at the end of the prior year.
The company’s long-term debt was $2.62 billion at the end of 2023, up from $2.50 billion at the end of 2022. The company’s net debt to adjusted EBITDA ratio was 2.4X.
AVY realized approximately $69 million in pre-tax savings from restructuring (net of transition costs) in 2023. The company also incurred pre-tax restructuring charges of around $79 million.
2023 Performance
Adjusted EPS decreased 14% year over year to $7.90 in 2023 but topped the Zacks Consensus Estimate of $7.87. Including one-time items, EPS was $6.20 in 2023, down 33% from the $9.21 reported in 2022.
Total revenues declined 7.5% year over year to $8.36 billion. The top line figure topped the Zacks Consensus Estimate of $8.34 billion.
Guidance for 2024
Avery Dennison expects adjusted EPS between $9.00 and $9.50 for 2024.
Price Performance
Shares of AVY have gained 6.8% in the past year compared with the industry’s growth of 15%.
Image Source: Zacks Investment Research
Zacks Rank and Other Stocks to Consider
Avery Dennison currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are AZZ Inc. (AZZ - Free Report) , Applied Industrial Technologies (AIT - Free Report) and A. O. Smith Corporation (AOS - Free Report) . AZZ currently sports a Zacks Rank #1 (Strong Buy), and AIT and AOS carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 51.8% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 26.1% in a year.
The Zacks Consensus Estimate for A. O. Smith’s 2024 earnings is pegged at $4.03 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 6.8%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 16% in the past year.