Avery Dennison outlines 6% Q1 2026 EPS growth target as high-value category mix accelerates

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• Apparel business saw a 7% decline, greater than anticipated, primarily due to changes in retailer ordering behavior amid tariff uncertainty

  80% confidence

• Compliance enforcement in general retail is expected to provide a tailwind for Intelligent Labels

  80% confidence

• Intelligent Labels delivered high single-digit growth

  80% confidence

• We expect restructuring savings of approximately $50 million as we continue to execute our productivity playbook, and we expect the normalization of a majority of the 2025 temporary savings

  80% confidence

• Base volumes were soft in the quarter, and productivity actions were used to offset wage inflation, with some onetime items and extra calendar days impacting results

  80% confidence

• Base volumes were a bit soft in the quarter, and productivity actions were used to offset wage inflation, with some onetime items and extra calendar days impacting results

  80% confidence

• The company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025, emphasizing the durability of our franchise and our ability to activate multiple levers across a range of macro scenarios

  80% confidence

• Apparel business saw a 7% decline, greater than anticipated, primarily due to changes in retailer ordering behavior amid tariff uncertainty

  80% confidence

• Expects restructuring benefits to be somewhat balanced across the year

  80% confidence

• Management is not happy with the organic growth trajectory over the last couple of years

  80% confidence

• Temporary savings headwind is on an order of magnitude basis probably pretty similar to the size of the restructuring actions, that $50 million

  80% confidence

• High-value categories margins are a number of points above average, significantly above the base categories

  80% confidence

• Not happy with the way organic growth trajectory has been over the last couple of years

  80% confidence

• Company continues to drive ongoing productivity all the time in terms of ELS savings, looking at reducing scrap, being more efficient in operations

  80% confidence

• Q4 delivered solid adjusted earnings per share of $2.45, up 3% compared to prior year

  80% confidence

• Continue to drive ongoing productivity all the time in terms of ELS savings, looking at reducing scrap, being more efficient in operations

  80% confidence

• Pricing typically follows raw material input cost changes, with productivity actions aimed at offsetting wage inflation

  80% confidence

• Expect restructuring savings of approximately $50 million as company continues to execute productivity playbook, and expect normalization of majority of 2025 temporary savings

  80% confidence

• The company continues to drive ongoing productivity through ELS savings, reducing scrap, and being more efficient in operations

  80% confidence

• Pricing typically follows raw material input cost changes, with productivity actions aimed at offsetting wage inflation

  80% confidence

• Higher working capital was due to high-value category mix, and CapEx will support both productivity and future capacity

  80% confidence

• High-value categories helped balance base categories, which were down low single digits in the quarter due to softer customer volumes

  80% confidence

• Walmart rollout would ramp in Q4 2026 and accelerate into 2027

  80% confidence

• Apparel business saw a 7% decline, greater than anticipated, primarily due to changes in retailer ordering behavior amid tariff uncertainty

  80% confidence

• The company is investing in digital capabilities, automation, and AI to enable additional operational productivity, strengthen service and quality, shorten innovation cycles, and provide more data-driven solutions

  80% confidence

• The Walmart announcement increased pipeline interest in Intelligent Labels

  80% confidence

• The Walmart announcement increased pipeline interest, indicating positive market reception

  80% confidence

• High-value categories are a number of points above average margin, significantly above the base categories as well

  80% confidence

• Restructuring benefits expected to be somewhat balanced across the year

  80% confidence

• Higher working capital was due to high-value category mix, and CapEx will support both productivity and future capacity

  80% confidence