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AVY benefited from volume gains and cost control, keeping margins steady despite currency headwinds.
Avery Dennison saw strong Materials growth, while Solutions lagged and the free cash flow turned positive.
Avery Dennison Corporation (AVY - Free Report) has posted adjusted earnings of $2.47 per share for the first quarter of 2026, rising 7.4% from the year-ago period and beating the Zacks Consensus Estimate of $2.41. Revenues came in at $2.298 billion, growing 7% year over year and surpassing the consensus mark of $2.271 billion by 1.2%.
The quarter featured modest organic growth and steady profitability. The company gained from volume-led performance and continued cost management.
Sales advanced 2.3% excluding currency, as a 4.7% foreign-currency headwind weighed on reported growth. Organic sales increased 1.1%, while acquisitions were a 1.2% drag on the quarter’s growth bridge. Our model expected organic sales to inch up 0.2%, and acquisitions to have a positive impact of 1%.
Avery Dennison Corporation Price, Consensus and EPS Surprise
Gross profit was $664.8 million, up from $621.5 million a year ago, with the gross margin essentially steady at 28.9%. Operating income was $271.9 million, marking a year-over-year increase of 6.8%. The operating margin came in at 11.8% for the quarter compared with the prior-year quarter’s 11.9%.
Adjusted EBITDA was $376.5 million, which marked a year-over-year increase of 6.8%. The adjusted EBITDA margin came in at 16.4%, flat with the first quarter of 2025.
AVY’s Segments Diverge on Growth & Margins
Materials Group delivered reported sales of $1.65 billion, up 11.4% year over year. Sales rose 3.6% excluding currency and 1.9% organically. We estimated revenues of $1.56 billion for this segment. Mid-single-digit volume/mix growth was partly offset by deflation-related price reductions. The segment’s adjusted operating profit increased 10.4% year over year to $254 million. Our estimate was $237 million.
Solutions Group sales were $649.2 million, down 2.8% year over year, with sales down 0.9% excluding currency and 0.9% organically. We estimated sales of $701 million for this segment. The company noted growth in higher-value categories, including Embelex and Vestcom, while Intelligent Labels and base categories were softer. The segment’s adjusted operating income dipped 14.2% year over year at $58.5 million. Our estimate was $65 million.
Avery Dennison’s Cash Flow Swing Is Meaningful
AVY generated an adjusted free cash flow of $104.4 million in the quarter, a sharp improvement from a negative $53.1 million in the year-ago period.
Capital returns remained active. The company returned $133 million to shareholders, including $72.3 million in dividends and $60.6 million in share repurchases, and noted that its share count at the quarter-end was down 1.9 million from a year ago (net of dilution from long-term incentive awards). Cash and cash equivalents ended at $255.1 million compared with 196 million in the prior-year quarter’s end. Net debt to adjusted EBITDA was 2.4X.
AVY’s Q2 View
For the second quarter of 2026, the company guided adjusted earnings to be $2.43-$2.53. The company expects reported sales growth of 2-4% and an organic sales increase of 0-2%.
Avery Dennison Stock’s Price Performance
AVY shares have lost 1% in the past year compared with the industry’s decline of 10.4%. In comparison, the broader Zacks Industrial Products sector has returned 39.5% and the S&P 500 has grown 35.6%.
Image Source: Zacks Investment Research
AVY’s Zacks Rank
Avery Dennison currently carries a Zacks Rank #4 (Sell).
AptarGroup, Inc. (ATR - Free Report) is scheduled to release first-quarter 2026 results on April 30. The Zacks Consensus Estimate for ATR’s first-quarter 2026 earnings is pegged at $1.15 per share, indicating a year-over-year dip of 4.2%.
The consensus estimate for AptarGroup’s top line is pegged at $963 million, indicating an increase of 8.5% from the prior year’s actual. ATR has a trailing four-quarter average earnings surprise of 3.1%.
Silgan Holdings (SLGN - Free Report) is slated to release first-quarter 2026 results on April 29. The Zacks Consensus Estimate for SLGN’s first-quarter 2026 earnings is pegged at 74 cents per share, indicating a year-over-year dip of 9.8%.
The consensus estimate for Silgan’s top line is pegged at $1.49 billion, indicating an increase of 1.8% from the prior year’s actual. SLGN has a trailing four-quarter average earnings surprise of 1.8%.
Q1 Performance of a Packaging Stock
Packaging Corporation of America (PKG - Free Report) posted adjusted earnings of $2.40 per share in the first quarter of 2026, up 3.9% from $2.31 a year ago. Packaging Corp’s results beat the Zacks Consensus Estimate of $2.17 by 10.6%.
Net sales rose 10.6% year over year to $2.37 billion but missed the consensus mark of $2.41 billion by 1.9%. Favorable pricing and mix, along with lower fiber costs, supported Packaging Corp’s results, though special items weighed on reported profitability.
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Avery Dennison Q1 Earnings Top Estimates on Volume Gains, Cost Control
Key Takeaways
Avery Dennison Corporation (AVY - Free Report) has posted adjusted earnings of $2.47 per share for the first quarter of 2026, rising 7.4% from the year-ago period and beating the Zacks Consensus Estimate of $2.41. Revenues came in at $2.298 billion, growing 7% year over year and surpassing the consensus mark of $2.271 billion by 1.2%.
The quarter featured modest organic growth and steady profitability. The company gained from volume-led performance and continued cost management.
Sales advanced 2.3% excluding currency, as a 4.7% foreign-currency headwind weighed on reported growth. Organic sales increased 1.1%, while acquisitions were a 1.2% drag on the quarter’s growth bridge. Our model expected organic sales to inch up 0.2%, and acquisitions to have a positive impact of 1%.
Avery Dennison Corporation Price, Consensus and EPS Surprise
Avery Dennison Corporation price-consensus-eps-surprise-chart | Avery Dennison Corporation Quote
Avery Dennison Keeps Profitability Steady
Gross profit was $664.8 million, up from $621.5 million a year ago, with the gross margin essentially steady at 28.9%. Operating income was $271.9 million, marking a year-over-year increase of 6.8%. The operating margin came in at 11.8% for the quarter compared with the prior-year quarter’s 11.9%.
Adjusted EBITDA was $376.5 million, which marked a year-over-year increase of 6.8%. The adjusted EBITDA margin came in at 16.4%, flat with the first quarter of 2025.
AVY’s Segments Diverge on Growth & Margins
Materials Group delivered reported sales of $1.65 billion, up 11.4% year over year. Sales rose 3.6% excluding currency and 1.9% organically. We estimated revenues of $1.56 billion for this segment. Mid-single-digit volume/mix growth was partly offset by deflation-related price reductions. The segment’s adjusted operating profit increased 10.4% year over year to $254 million. Our estimate was $237 million.
Solutions Group sales were $649.2 million, down 2.8% year over year, with sales down 0.9% excluding currency and 0.9% organically. We estimated sales of $701 million for this segment. The company noted growth in higher-value categories, including Embelex and Vestcom, while Intelligent Labels and base categories were softer. The segment’s adjusted operating income dipped 14.2% year over year at $58.5 million. Our estimate was $65 million.
Avery Dennison’s Cash Flow Swing Is Meaningful
AVY generated an adjusted free cash flow of $104.4 million in the quarter, a sharp improvement from a negative $53.1 million in the year-ago period.
Capital returns remained active. The company returned $133 million to shareholders, including $72.3 million in dividends and $60.6 million in share repurchases, and noted that its share count at the quarter-end was down 1.9 million from a year ago (net of dilution from long-term incentive awards). Cash and cash equivalents ended at $255.1 million compared with 196 million in the prior-year quarter’s end. Net debt to adjusted EBITDA was 2.4X.
AVY’s Q2 View
For the second quarter of 2026, the company guided adjusted earnings to be $2.43-$2.53. The company expects reported sales growth of 2-4% and an organic sales increase of 0-2%.
Avery Dennison Stock’s Price Performance
AVY shares have lost 1% in the past year compared with the industry’s decline of 10.4%. In comparison, the broader Zacks Industrial Products sector has returned 39.5% and the S&P 500 has grown 35.6%.
AVY’s Zacks Rank
Avery Dennison currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Industrial Product Stocks Awaiting Results
AptarGroup, Inc. (ATR - Free Report) is scheduled to release first-quarter 2026 results on April 30. The Zacks Consensus Estimate for ATR’s first-quarter 2026 earnings is pegged at $1.15 per share, indicating a year-over-year dip of 4.2%.
The consensus estimate for AptarGroup’s top line is pegged at $963 million, indicating an increase of 8.5% from the prior year’s actual. ATR has a trailing four-quarter average earnings surprise of 3.1%.
Silgan Holdings (SLGN - Free Report) is slated to release first-quarter 2026 results on April 29. The Zacks Consensus Estimate for SLGN’s first-quarter 2026 earnings is pegged at 74 cents per share, indicating a year-over-year dip of 9.8%.
The consensus estimate for Silgan’s top line is pegged at $1.49 billion, indicating an increase of 1.8% from the prior year’s actual. SLGN has a trailing four-quarter average earnings surprise of 1.8%.
Q1 Performance of a Packaging Stock
Packaging Corporation of America (PKG - Free Report) posted adjusted earnings of $2.40 per share in the first quarter of 2026, up 3.9% from $2.31 a year ago. Packaging Corp’s results beat the Zacks Consensus Estimate of $2.17 by 10.6%.
Net sales rose 10.6% year over year to $2.37 billion but missed the consensus mark of $2.41 billion by 1.9%. Favorable pricing and mix, along with lower fiber costs, supported Packaging Corp’s results, though special items weighed on reported profitability.