Avery Dennison preliminary Q3 EPS rises to $2.24
The 2026 adjusted EPS outlook is $10.10 to $10.24, with the company assuming the vast majority of remaining customer destocking largely unwinds in Q4.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Avery Dennison Corp. (AVY) reported preliminary, unaudited third-quarter 2026 net sales of $2.3315 billion, up 5.2%, and diluted reported EPS of $2.24, up 5.2%. Adjusted EPS (non-GAAP) was $2.42, up 2.1%, and organic sales change was 3.7%. Materials Group sales rose 8.5% to $1.6445 billion; Solutions Group sales declined 1.8% to $687.0 million. Adjusted operating margins were 14.1% for Materials, down 110 basis points, and 10.8% for Solutions, up 80 basis points.
For full-year 2026, reported EPS guidance is $9.45 to $9.59 and adjusted EPS guidance is $10.10 to $10.24, including an estimated $0.65 impact from restructuring charges and other items. The company expects ~3.5% organic sales growth and assumes the vast majority of remaining customer inventory destocking will largely unwind in Q4. In the first three quarters, it returned $481 million to shareholders through repurchases and dividends, including 1.5 million shares repurchased for $257 million. Third-quarter adjusted free cash flow was $246.0 million, and net debt to adjusted EBITDA was 2.2x at quarter-end. Through the first three quarters, it realized approximately $54 million in pretax restructuring savings and incurred approximately $43 million in pretax restructuring charges.
1 point · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQ3 sales and reported diluted EPS each rose 5.2% year over year.
Negative
- None.
Insights
Analyzing...
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net sales: $2.3315 billion
Reported diluted EPS: $2.24 per share
Adjusted EPS (non-GAAP): $2.42 per share
+5 more
8 metrics
Net sales
$2.3315 billion
Third quarter 2026; up 5.2% year over year
Reported diluted EPS
$2.24 per share
Third quarter 2026; up 5.2% year over year
Adjusted EPS (non-GAAP)
$2.42 per share
Third quarter 2026; up 2.1% year over year
Organic sales change (non-GAAP)
3.7%
Third quarter 2026
Adjusted free cash flow (non-GAAP)
$246.0 million
Third quarter 2026
Cash returned to shareholders
$481 million
First three quarters of 2026, through share repurchases and dividends
Net debt to adjusted EBITDA
2.2x
End of third quarter 2026
Full-year adjusted EPS guidance (non-GAAP)
$10.10 to $10.24 per share
Full-year 2026
Key Terms
Organic sales change, Adjusted EBITDA, Adjusted free cash flow, Net debt to adjusted EBITDA ratio
4 terms
Organic sales change financial
"Organic sales change refers to sales change ex. currency"
Organic sales change measures how a company’s revenue grows or shrinks from its ongoing operations after removing effects from things like buying or selling businesses and swings in currency value. It tells investors whether the core business is gaining or losing customers and market share — like judging a garden’s growth by the plants you tended yourself, not by adding new pots or blaming the weather — which helps separate real performance from one-time or external factors.
Adjusted EBITDA financial
"Adjusted EBITDA refers to adjusted operating income before depreciation and amortization"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Adjusted free cash flow financial
"Adjusted free cash flow refers to cash flow provided by (used in) operating activities"
Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.
Net debt to adjusted EBITDA ratio financial
"Net debt to adjusted EBITDA ratio refers to total debt"
Net debt to adjusted EBITDA ratio compares a company’s total borrowings minus cash on hand (net debt) with its recurring operating cash flow before interest, tax, depreciation and one‑time items (adjusted EBITDA). Think of it like how many years of steady earnings it would take to pay off the company’s net debt; lower numbers mean less leverage and usually lower credit and default risk, which matters for investors assessing balance‑sheet strength and valuation.
Earnings Snapshot
Net sales: $2.3315 billion · Guidance included
Third quarter 2026 ended September 30, 2026; preliminary, unaudited
Net sales
$2.3315 billion
Up 5.2% year over year
Reported diluted EPS
$2.24 per share
Up 5.2% year over year
Adjusted EPS (non-GAAP)
$2.42 per share
Up 2.1% year over year
Guidance
Full-year 2026 reported EPS of $9.45 to $9.59 and adjusted EPS (non-GAAP) of $10.10 to $10.24, including an estimated $0.65 impact from restructuring charges and other items.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did AVY perform in Q3 2026?
Avery Dennison reported preliminary, unaudited third-quarter 2026 net sales of $2.3315 billion, up 5.2%, and diluted reported EPS of $2.24, up 5.2%. Adjusted EPS (non-GAAP) was $2.42, up 2.1%, and organic sales change was 3.7%.
What is AVY's 2026 EPS guidance?
Avery Dennison expects full-year 2026 reported EPS of $9.45 to $9.59 and adjusted EPS (non-GAAP) of $10.10 to $10.24. Adjusted EPS guidance includes an estimated $0.65 impact from restructuring charges and other items.
How did destocking affect AVY's Q3 results?
The supplemental materials state that Q3 organic sales growth was 3.7%, including an estimated ~2-point impact from destocking, roughly half of what had been anticipated for Q3. Adjusted EPS included an estimated 6% impact from destocking.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code (440 ) 534-6000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Section 2 — Corporate Governance and Management
Item 2.02 Results of Operations and Financial Condition.
Avery Dennison Corporation’s (the “Company’s”) press release, dated October 29, 2026, announcing its preliminary, unaudited financial results for third quarter 2026 and guidance for full-year 2026, is attached hereto as Exhibit 99.1 and being furnished (not filed) with this Form 8-K. The Company’s supplemental presentation materials, dated October 29, 2026, regarding its preliminary, unaudited financial review and analysis for third quarter 2026 and guidance for full-year 2026, is attached hereto as Exhibit 99.2 and being furnished (not filed) with this Form 8-K. The press release and presentation materials are also available on the Company's website at www.investors.averydennison.com.
The Company will discuss its preliminary, unaudited financial results during a webcast and teleconference to be held at 11:00 a.m. ET on October 29, 2026. To access the webcast and teleconference, please go to the Company’s website at www.investors.averydennison.com.
Section 9 — Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Exhibit Title | |||||||
| 99.1 | Press release, dated October 29, 2026, announcing the Company’s preliminary, unaudited financial results for third quarter 2026. | |||||||
| 99.2 | Supplemental presentation materials, dated October 29, 2026, regarding the Company’s preliminary, unaudited financial review and analysis for third quarter 2026. | |||||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | |||||||
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this Form 8-K and the exhibits attached hereto are forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other business targets, are subject to certain risks and uncertainties.
The Company believes that the most significant risk factors that could affect its financial performance in the near term include: (i) the impact on underlying demand for the Company’s products from global economic conditions, tariffs, geopolitical uncertainty, and changes in environmental standards, regulations and preferences; (ii) competitors' actions, including pricing, expansion in key markets, and product offerings; (iii) the cost and availability of raw materials; (iv) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through price increases, without a significant loss of volume; (v) foreign currency fluctuations; and (vi) the execution and integration of acquisitions.
Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but not limited to, risks and uncertainties related to the following:
•International Operations – worldwide economic, social, geopolitical and market conditions; changes in geopolitical conditions, including those related to trade relations and tariffs, China, recent conflicts involving the U.S., Israel and Iran and related hostilities in the Middle East, the Russia-Ukraine war, and the Israel-Hamas war; fluctuations in foreign currency exchange rates; and other risks associated with international operations, including in emerging markets
•The Company’s Business – fluctuations in demand affecting sales to customers; fluctuations in the cost and availability of raw materials and energy; changes in the Company’s markets due to competitive conditions, technological developments, laws and regulations, and customer preferences; environmental regulations and sustainability trends; the impact of competitive products and pricing; the execution and integration of acquisitions; selling prices; customer and supplier concentrations or consolidations; the financial condition of distributors; outsourced manufacturers; product and service quality claims; restructuring and other cost reduction actions; our ability to generate sustained productivity improvement and our ability to achieve and
sustain targeted cost reductions; the timely development and market acceptance of new products, including sustainable or sustainably-sourced products; our investment in development activities and new production facilities; the collection of receivables from customers; and our sustainability and governance practices
•Information Technology – disruptions in information technology systems; cybersecurity events or other security breaches; and successful installation of new or upgraded information technology systems
•Income Taxes – fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; outcome of tax audits; and the realization of deferred tax assets
•Human Capital – recruitment and retention of employees and collective labor arrangements
•The Company’s Indebtedness – the Company’s ability to obtain adequate financing arrangements and maintain access to capital; credit rating risks; fluctuations in interest rates; and compliance with the Company’s debt covenants
•Ownership of the Company’s Stock – potential significant variability of the Company’s stock price and amounts of future dividends and share repurchases
•Legal and Regulatory Matters – protection and infringement of the Company’s intellectual property and the impact of legal and regulatory proceedings, including with respect to anti-corruption, environmental, health and safety, and trade compliance
•Other Financial Matters – fluctuations in pension costs and goodwill impairment
For a more detailed discussion of these factors, see Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2025 Form 10-K, filed with the Securities and Exchange Commission on February 25, 2026, and subsequent quarterly reports on Form 10-Q. The forward-looking statements included in this Form 8-K are made only as of the date of this Form 8-K, and the Company undertakes no obligation to update these statements to reflect subsequent events or circumstances, other than as may be required by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVERY DENNISON CORPORATION | |||||||||||
Date: October 29, 2026 | By: | /s/ Gregory S. Lovins | |||||||||
Name: Gregory S. Lovins | |||||||||||
Title: Senior Vice President and | |||||||||||
Chief Financial Officer | |||||||||||
Exhibit 99.1
For Immediate Release
AVERY DENNISON ANNOUNCES
THIRD QUARTER 2026 RESULTS
Delivered strong sales, earnings and cash flow
●3Q26 Reported EPS of $2.24
○Adjusted EPS (non-GAAP) of $2.42, up 2.1%
●3Q26 Net sales of $2.3 billion, up 5.2%
○Sales change ex. currency (non-GAAP) up 4.9%
○Organic sales change (non-GAAP) up 3.7%
●FY26 Reported EPS guidance of $9.45 to $9.59
○FY26 Adjusted EPS guidance of $10.10 to $10.24
MENTOR, Ohio, October 29, 2026 – Avery Dennison Corporation (NYSE:AVY), a leading global materials science and digital identification solutions company, today announced preliminary, unaudited results for its third quarter ended September 30, 2026. Non-GAAP financial measures referenced in this release are reconciled from GAAP in the attached financial schedules. Unless otherwise indicated, comparisons are to the same period in the prior year.
“We delivered another quarter of strong results, highlighted by continued improvement in our underlying organic sales and earnings growth,” said Deon Stander, Avery Dennison’s president and CEO.
“Our focus on innovation and service-led differentiation drove mid-single digit organic growth in both our high-value categories and base businesses. In the face of higher inflation and customer destocking impacts, our teams demonstrated strong operational agility, delivering robust productivity and generating impressive free cash flow.
“I want to thank our global teams for their agility and performance. Their commitment strengthens our competitive moat as we execute through the balance of the year and beyond.”
Third Quarter 2026 Results by Segment
Materials Group
●Reported sales increased 8.5% to $1.6 billion.
●Sales up 6.7% ex. currency
●Sales up 4.9% on an organic basis
○High-value categories up mid-single digits
○Base categories up mid-single digits
○Volume/mix growth of low single digits and price benefit of mid-single digits
●Reported operating margin of 13.7%
○Adjusted operating margin (non-GAAP) of 14.1%, down 110 basis points
○Adjusted EBITDA margin (non-GAAP) of 16.4%, down 110 basis points, as productivity was more than offset by negative volume/mix and higher employee-related costs.
Solutions Group
●Reported sales decreased 1.8% to $687 million.
●Sales up 0.8% ex. currency
●Sales up 0.8% on an organic basis
○High-value categories comparable to prior year
○Base categories up low single digits
○Overall apparel categories up mid-single digits
●Reported operating margin of 10.5%
○Adjusted operating margin of 10.8%, up 80 basis points
○Adjusted EBITDA margin of 17.8%, up 80 basis points, as productivity was partially offset by higher employee-related costs.
Other
Capital Deployment and Balance Sheet
The company continues to deploy capital in a disciplined manner, executing its long-term capital allocation strategy.
During the first three quarters of 2026, the company returned $481 million in cash to shareholders through a combination of share repurchases and dividends. The company repurchased 1.5 million shares, with payments for share purchases totaling $257 million. Net of dilution, the company’s share count at the end of the third quarter was down 1.9 million compared to the same time last year.
The company’s balance sheet remains strong. Net debt to adjusted EBITDA (non-GAAP) was 2.2x at the end of the third quarter.
Income Taxes
The company’s reported effective tax rate was 29.6% and 29.1% for the three and nine months ended September 30, 2026, respectively. The adjusted tax rate (non-GAAP) was 26.9% for both the three and nine months ended September 30, 2026.
Cost Reduction Actions
Through the first three quarters of the year, the company realized approximately $54 million in pre-tax savings from restructuring actions and incurred approximately $43 million in pre-tax restructuring charges.
Guidance
In its supplemental presentation materials, “Third Quarter 2026 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its financial results. Based on the factors listed and other assumptions, the company expects full year 2026 reported EPS of $9.45 to $9.59.
Excluding an estimated $0.65 impact of restructuring charges and other items, the company expects full year 2026 adjusted EPS of $10.10 to $10.24.
For more details on the company’s results, see the financial schedules accompanying this news release, as well as the supplemental presentation materials, “Third Quarter 2026 Financial Review and Analysis,” posted on the company’s website at www.investors.averydennison.com, and furnished to the SEC on Form 8-K.
Throughout this release and the supplemental presentation materials, amounts on a per share basis reflect fully diluted shares outstanding.
About Avery Dennison
Avery Dennison Corporation (NYSE: AVY) is a global materials science and digital identification solutions company. We are Making Possible™ products and solutions that help advance the industries we serve, providing branding and information solutions that optimize labor and supply chain efficiency, reduce waste and mitigate loss, advance sustainability, circularity and transparency and better connect brands and consumers. We design and develop labeling and functional materials, radio-frequency identification (RFID) inlays and tags, software applications that connect the physical and digital and offerings that enhance branded packaging and carry or display information that improves the customer experience. Serving industries worldwide — including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive — we employ approximately 35,000 employees in more than 50 countries. Our reported sales in 2025 were $8.9 billion. Learn more at www.averydennison.com.
# # #
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other business targets, are subject to certain risks and uncertainties.
We believe that the most significant risk factors that could affect our financial performance in the near term include: (i) the impact on underlying demand for our products from global economic conditions, tariffs, geopolitical uncertainty, and changes in environmental standards, regulations and preferences; (ii) competitors’ actions, including pricing, expansion in key markets, and product offerings; (iii) the cost and availability of raw materials; (iv) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through price increases, without a significant loss of volume; (v) foreign currency fluctuations; and (vi) the execution and integration of acquisitions.
Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but not limited to, risks and uncertainties related to the following:
●International Operations – worldwide economic, social, geopolitical and market conditions; changes in geopolitical conditions, including those related to trade relations and tariffs, China, recent conflicts involving the U.S., Israel and Iran and related hostilities in the Middle East, the Russia-Ukraine war, and the Israel-Hamas war; fluctuations in foreign currency exchange rates; and other risks associated with international operations, including in emerging markets
●Our Business – fluctuations in demand affecting sales to customers; fluctuations in the cost and availability of raw materials and energy; changes in our markets due to competitive conditions, technological developments, laws and regulations, and customer preferences; environmental regulations and sustainability trends; the impact of competitive products and pricing; the execution and integration of acquisitions; selling prices; customer and supplier concentrations or consolidations; the financial condition of distributors; outsourced manufacturers; product and service quality claims; restructuring and other cost reduction actions; our ability to generate sustained productivity improvement and our ability to achieve and sustain targeted cost reductions; the timely development and market acceptance of new products, including sustainable or sustainably-sourced products; our investment in development activities and new production facilities; the collection of receivables from customers; and our sustainability and governance practices
●Information Technology – disruptions in information technology systems; cybersecurity events or other security breaches; and successful installation of new or upgraded information technology systems
●Income Taxes – fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; outcome of tax audits; and the realization of deferred tax assets
●Human Capital – recruitment and retention of employees and collective labor arrangements
●Our Indebtedness – our ability to obtain adequate financing arrangements and maintain access to capital; credit rating risks; fluctuations in interest rates; and compliance with our debt covenants
●Ownership of Our Stock – potential significant variability of our stock price and amounts of future dividends and share repurchases
●Legal and Regulatory Matters – protection and infringement of our intellectual property and the impact of legal and regulatory proceedings, including with respect to anti-corruption, environmental, health and safety, and trade compliance
●Other Financial Matters – fluctuations in pension costs and goodwill impairment
For a more detailed discussion of these factors, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K, filed with the Securities and Exchange Commission on February 25, 2026, and subsequent quarterly reports on Form 10-Q.
The forward-looking statements included in this document are made only as of the date of this document, and we undertake no obligation to update these statements to reflect subsequent events or circumstances, other than as may be required by law.
For more information and to listen to a live broadcast or an audio replay of the quarterly conference call with analysts, visit the Avery Dennison website at www.investors.averydennison.com.
Contacts:
William Gilchrist
Vice President, Investor Relations
investorcom@averydennison.com
Kristin Robinson
Vice President, Global Communications
kristin.robinson@averydennison.com
| Third Quarter Financial Summary - Preliminary, unaudited | ||||||||||||||||||||
| (in millions, except % and per share amounts) | ||||||||||||||||||||
| 3Q | 3Q | % Net Sales Change vs. PY | ||||||||||||||||||
| 2026 | 2025 | GAAP | Ex. Currency | Organic | ||||||||||||||||
| (non-GAAP) | (non-GAAP) | |||||||||||||||||||
| Net sales, by segment: | ||||||||||||||||||||
| Materials Group | $ | 1,644.5 | $ | 1,516.0 | 8.5% | 6.7% | 4.9% | |||||||||||||
| Solutions Group | 687.0 | 699.5 | (1.8)% | 0.8% | 0.8% | |||||||||||||||
| Total net sales | $ | 2,331.5 | $ | 2,215.5 | 5.2% | 4.9% | 3.7% | |||||||||||||
% of Net Sales | ||||||||||||||||||||
| 3Q | 3Q | % | 3Q | 3Q | ||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | ||||||||||||||||
| Segment adjusted operating income and margins: | ||||||||||||||||||||
| Materials Group | $ | 231.1 | $ | 230.1 | 14.1% | 15.2% | ||||||||||||||
| Solutions Group | 74.4 | 69.7 | 10.8% | 10.0% | ||||||||||||||||
| Corporate expense | (23.4) | (18.7) | ||||||||||||||||||
| Adjusted operating income and margins (non-GAAP) | $ | 282.1 | $ | 281.1 | 0.4% | 12.1% | 12.7% | |||||||||||||
| Segment adjusted EBITDA and margins: | ||||||||||||||||||||
| Materials Group | $ | 268.9 | $ | 264.9 | 16.4% | 17.5% | ||||||||||||||
| Solutions Group | 122.2 | 118.9 | 17.8% | 17.0% | ||||||||||||||||
| Corporate expense | (23.4) | (18.7) | ||||||||||||||||||
| Adjusted EBITDA and margins (non-GAAP) | $ | 367.7 | $ | 365.1 | 0.7% | 15.8% | 16.5% | |||||||||||||
| Net income | $ | 169.7 | $ | 166.3 | 2.0% | 7.3% | 7.5% | |||||||||||||
| Adjusted net income (non-GAAP) | $ | 183.3 | $ | 184.8 | (0.8)% | 7.9% | 8.3% | |||||||||||||
| Net income per common share, assuming dilution | $ | 2.24 | $ | 2.13 | 5.2% | |||||||||||||||
| Adjusted net income per common share, assuming dilution (non-GAAP) | $ | 2.42 | $ | 2.37 | 2.1% | |||||||||||||||
| Adjusted free cash flow (non-GAAP) | $ | 246.0 | $ | 268.7 | ||||||||||||||||
| YTD Adjusted free cash flow | $ | 715.8 | $ | 404.5 | ||||||||||||||||
| See schedules A-4 to A-8 for reconciliations of non-GAAP financial measures from GAAP. | ||||||||||||||||||||
A-1
AVERY DENNISON CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
| (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Sep. 30, 2026 | Sep. 27, 2025 | Sep. 30, 2026 | Sep. 27, 2025 | ||||||||||||||||||||
| Net sales | $ | 2,331.5 | $ | 2,215.5 | $ | 7,092.9 | $ | 6,584.3 | |||||||||||||||
| Cost of products sold | 1,676.7 | 1,580.5 | 5,043.9 | 4,688.7 | |||||||||||||||||||
| Gross profit | 654.8 | 635.0 | 2,049.0 | 1,895.6 | |||||||||||||||||||
| Marketing, general and administrative expense | 372.7 | 353.9 | 1,142.6 | 1,053.3 | |||||||||||||||||||
| Other expense (income), net | 9.6 | 16.7 | 48.5 | 37.1 | |||||||||||||||||||
| Interest expense | 35.7 | 33.3 | 107.2 | 98.2 | |||||||||||||||||||
| Other non-operating expense (income), net | (4.4) | (3.7) | (13.6) | (10.3) | |||||||||||||||||||
| Income before taxes | 241.2 | 234.8 | 764.3 | 717.3 | |||||||||||||||||||
| Provision for income taxes | 71.5 | 68.5 | 222.4 | 195.7 | |||||||||||||||||||
| Net income | $ | 169.7 | $ | 166.3 | $ | 541.9 | $ | 521.6 | |||||||||||||||
| Per share amounts: | |||||||||||||||||||||||
| Net income per common share, assuming dilution | $ | 2.24 | $ | 2.13 | $ | 7.09 | $ | 6.64 | |||||||||||||||
Weighted average number of common shares outstanding, assuming dilution | 75.9 | 78.0 | 76.4 | 78.6 | |||||||||||||||||||
-more-
A-2
AVERY DENNISON CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
| (UNAUDITED) | |||||||||||
| ASSETS | Sep. 30, 2026 | Sep. 27, 2025 | |||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 271.4 | $ | 536.3 | |||||||
| Trade accounts receivable, net | 1,709.6 | 1,627.8 | |||||||||
| Inventories | 1,048.2 | 1,037.4 | |||||||||
| Other current assets | 354.5 | 322.2 | |||||||||
| Total current assets | 3,383.7 | 3,523.7 | |||||||||
| Property, plant and equipment, net | 1,558.7 | 1,579.9 | |||||||||
| Goodwill and other intangibles resulting from business acquisitions, net | 3,012.9 | 2,723.9 | |||||||||
| Deferred tax assets | 140.1 | 132.3 | |||||||||
| Other assets | 1,073.0 | 907.1 | |||||||||
| Total assets | $ | 9,168.4 | $ | 8,866.9 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Short-term borrowings and current portion of long-term debt and finance leases | $ | 440.8 | $ | 578.8 | |||||||
| Accounts payable | 1,465.9 | 1,303.2 | |||||||||
| Other current liabilities | 1,008.3 | 905.1 | |||||||||
| Total current liabilities | 2,915.0 | 2,787.1 | |||||||||
| Long-term debt and finance leases | 3,174.2 | 3,202.3 | |||||||||
| Other long-term liabilities | 690.6 | 666.5 | |||||||||
| Shareholders' equity: | |||||||||||
| Common stock | 124.1 | 124.1 | |||||||||
| Capital in excess of par value | 831.5 | 829.6 | |||||||||
| Retained earnings | 5,944.1 | 5,498.3 | |||||||||
| Treasury stock at cost | (4,144.4) | (3,784.7) | |||||||||
| Accumulated other comprehensive loss | (366.7) | (456.3) | |||||||||
| Total shareholders' equity | 2,388.6 | 2,211.0 | |||||||||
| Total liabilities and shareholders' equity | $ | 9,168.4 | $ | 8,866.9 | |||||||
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A-3
AVERY DENNISON CORPORATION
PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
| (UNAUDITED) | |||||||||||
| Nine Months Ended | |||||||||||
| Sep. 30, 2026 | Sep. 27, 2025 | ||||||||||
| Operating Activities | |||||||||||
| Net income | $ | 541.9 | $ | 521.6 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 158.5 | 154.6 | |||||||||
| Amortization | 100.3 | 88.1 | |||||||||
| Provision for credit losses and sales returns | 35.5 | 39.2 | |||||||||
| Stock-based compensation | 22.3 | 22.7 | |||||||||
| Deferred taxes and other non-cash taxes | (27.1) | (14.7) | |||||||||
| Other non-cash expense and loss (income and gain), net | 39.1 | 31.7 | |||||||||
Changes in assets and liabilities and other adjustments | (27.0) | (338.6) | |||||||||
| Net cash provided by operating activities | 843.5 | 504.6 | |||||||||
| Investing Activities | |||||||||||
| Purchases of property, plant and equipment | (115.1) | (101.9) | |||||||||
| Purchases of software and other deferred charges | (20.5) | (22.9) | |||||||||
| Proceeds from sales of property, plant and equipment | 1.9 | 20.2 | |||||||||
| Proceeds from insurance and sales (purchases) of investments, net | 6.0 | 4.5 | |||||||||
| Proceeds from settlement of net investment hedges | 14.4 | 6.2 | |||||||||
| Payments for acquisitions, net of cash acquired, and venture investments | (81.5) | (10.7) | |||||||||
| Net cash used in investing activities | (194.8) | (104.6) | |||||||||
| Financing Activities | |||||||||||
| Net increase (decrease) in borrowings with maturities of three months or less | (69.1) | 482.0 | |||||||||
| Additional long-term borrowings | --- | 576.8 | |||||||||
| Repayments of long-term debt and finance leases | (5.6) | (558.3) | |||||||||
| Dividends paid | (223.9) | (216.0) | |||||||||
| Share repurchases | (257.2) | (453.6) | |||||||||
| Net (tax withholding) proceeds related to stock-based compensation | (9.6) | (12.7) | |||||||||
| Payments for settlement of fair value hedges | (14.4) | (13.5) | |||||||||
| Other | (0.5) | (0.3) | |||||||||
| Net cash used in financing activities | (580.3) | (195.6) | |||||||||
| Effect of foreign currency translation on cash balances | 0.2 | 2.8 | |||||||||
| Increase (decrease) in cash and cash equivalents | 68.6 | 207.2 | |||||||||
| Cash and cash equivalents, beginning of year | 202.8 | 329.1 | |||||||||
| Cash and cash equivalents, end of period | $ | 271.4 | $ | 536.3 | |||||||
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A-4
Reconciliation of Non-GAAP Financial Measures from GAAP
We report our financial results in conformity with accounting principles generally accepted in the United States of America, or GAAP, and also communicate with investors using certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. These non-GAAP financial measures are intended to supplement the presentation of our financial results prepared in accordance with GAAP. We use these non-GAAP financial measures internally to evaluate trends in our underlying performance, as well as to facilitate comparisons with the results of competitors for quarters and year-to-date periods, as applicable. Based on feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are also useful to their assessments of our performance and operating trends, as well as liquidity. Reconciliations of our non-GAAP financial measures from the most directly comparable GAAP financial measures are provided in accordance with Regulations G and S-K.
Our non-GAAP financial measures exclude the impact of certain events, activities or strategic decisions. The accounting effects of these events, activities or decisions, which are included in the GAAP financial measures, may make it more difficult to assess our underlying performance in a single period. By excluding the accounting effects, positive or negative, of certain items (e.g., restructuring charges, outcomes of certain legal matters and settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, gains or losses from curtailment or settlement of pension obligations, gains or losses on sales of certain assets, gains or losses on venture and other investments, currency adjustments due to highly inflationary economies, and other items), we believe that we are providing meaningful supplemental information that facilitates an understanding of our core operating results and liquidity measures. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency or timing.
We use the non-GAAP financial measures described below in the accompanying news release.
Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, currency adjustments for transitional reporting of highly inflationary economies and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for the estimated impact of extra days in our fiscal year and the calendar shift resulting from extra days in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current-period average exchange rates to exclude the effect of foreign currency fluctuations. Our 2025 fiscal year began on December 29, 2024 and ended on December 31, 2025; fiscal years 2026 and beyond are coincident with the calendar year, beginning on January 1 and ending on December 31.
Organic sales change refers to sales change ex. currency, excluding the estimated impact of acquisitions and product line divestitures.
We believe that sales change ex. currency and organic sales change assist investors in evaluating the sales change from the ongoing activities of our businesses and enhance their ability to evaluate our results from period to period.
Adjusted operating income refers to net income adjusted for taxes; other expense (income), net; interest expense; and other non-operating expense (income), net.
Adjusted EBITDA refers to adjusted operating income before depreciation and amortization.
Adjusted operating margin refers to adjusted operating income as a percentage of net sales.
Adjusted EBITDA margin refers to adjusted EBITDA as a percentage of net sales.
Adjusted tax rate refers to the projected full-year GAAP tax rate, adjusted to exclude certain unusual or infrequent events that are expected to significantly impact that rate, such as effects of certain discrete tax planning actions, impacts related to enactments of tax law changes, and other items.
Adjusted net income refers to income before taxes, tax-effected at the adjusted tax rate, and adjusted for tax-effected restructuring charges and other items.
Adjusted net income per common share, assuming dilution (adjusted EPS) refers to adjusted net income divided by the weighted average number of common shares outstanding, assuming dilution.
We believe that adjusted operating margin, adjusted EBITDA margin, adjusted net income, and adjusted EPS assist investors in understanding our core operating trends and comparing our results with those of our competitors.
Net debt to adjusted EBITDA ratio refers to total debt (including finance leases) less cash and cash equivalents, divided by adjusted EBITDA for the last twelve months. We believe that the net debt to adjusted EBITDA ratio assists investors in assessing our leverage position.
Adjusted free cash flow refers to cash flow provided by (used in) operating activities, less payments for property, plant and equipment, less payments for software and other deferred charges, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from insurance and sales (purchases) of investments. Where applicable, adjusted free cash flow is also adjusted for certain acquisition-related transaction costs, proceeds from company-owned life insurance policies and net cash used for Argentine Blue Chip Swap securities. We believe that adjusted free cash flow assists investors by showing the amount of cash we have available for debt reductions, dividends, share repurchases and acquisitions.
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A-5
AVERY DENNISON CORPORATION
PRELIMINARY RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FROM GAAP
(In millions, except % and per share amounts)
| (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Sep. 30, 2026 | Sep. 27, 2025 | Sep. 30, 2026 | Sep. 27, 2025 | ||||||||||||||||||||
| Reconciliation of adjusted operating and EBITDA margins from GAAP: | |||||||||||||||||||||||
| Net sales | $ | 2,331.5 | $ | 2,215.5 | $ | 7,092.9 | $ | 6,584.3 | |||||||||||||||
| Income before taxes | $ | 241.2 | $ | 234.8 | $ | 764.3 | $ | 717.3 | |||||||||||||||
| Income before taxes as a percentage of net sales | 10.3 | % | 10.6 | % | 10.8 | % | 10.9 | % | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Interest expense | $ | 35.7 | $ | 33.3 | $ | 107.2 | $ | 98.2 | |||||||||||||||
| Other non-operating expense (income), net | (4.4) | (3.7) | (13.6) | (10.3) | |||||||||||||||||||
Operating income before interest expense, other non-operating expense (income) and taxes | $ | 272.5 | $ | 264.4 | $ | 857.9 | $ | 805.2 | |||||||||||||||
| Operating margins | 11.7 | % | 11.9 | % | 12.1 | % | 12.2 | % | |||||||||||||||
| Net income | $ | 169.7 | $ | 166.3 | $ | 541.9 | $ | 521.6 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Restructuring charges, net of reversals: | |||||||||||||||||||||||
| Severance and related costs, net of reversals | 8.1 | 7.5 | 38.8 | 20.1 | |||||||||||||||||||
| Asset impairment and lease cancellation charges | 0.3 | 2.3 | 4.0 | 2.6 | |||||||||||||||||||
| Outcomes of legal matters and settlements | 1.3 | 4.7 | 2.0 | 4.7 | |||||||||||||||||||
| Loss from Argentine peso remeasurement | 0.5 | 1.9 | 1.8 | 4.4 | |||||||||||||||||||
| (Gain) loss on sales of assets | 0.4 | (0.4) | 0.3 | (11.5) | |||||||||||||||||||
| (Gain) loss on venture and other investments | (1.0) | (1.3) | 1.5 | 14.8 | |||||||||||||||||||
| Transaction and related costs | --- | 2.0 | 0.1 | 2.0 | |||||||||||||||||||
| Interest expense | 35.7 | 33.3 | 107.2 | 98.2 | |||||||||||||||||||
Other non-operating expense (income), net(1) | (4.4) | (3.7) | (13.6) | (10.3) | |||||||||||||||||||
| Provision for income taxes | 71.5 | 68.5 | 222.4 | 195.7 | |||||||||||||||||||
| Adjusted operating income (non-GAAP) | $ | 282.1 | $ | 281.1 | $ | 906.4 | $ | 842.3 | |||||||||||||||
| Adjusted operating margins (non-GAAP) | 12.1 | % | 12.7 | % | 12.8 | % | 12.8 | % | |||||||||||||||
| Depreciation and amortization | $ | 85.6 | $ | 84.0 | $ | 258.8 | $ | 242.7 | |||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 367.7 | $ | 365.1 | $ | 1,165.2 | $ | 1,085.0 | |||||||||||||||
| Adjusted EBITDA margins (non-GAAP) | 15.8 | % | 16.5 | % | 16.4 | % | 16.5 | % | |||||||||||||||
| Reconciliation of adjusted net income from GAAP: | |||||||||||||||||||||||
| Net income | $ | 169.7 | $ | 166.3 | $ | 541.9 | $ | 521.6 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Restructuring charges and other items | 9.5 | 16.6 | 48.2 | 36.9 | |||||||||||||||||||
| Tax effect on restructuring charges and other items | (3.2) | (3.9) | (12.4) | (11.4) | |||||||||||||||||||
Impact of adjusted tax rate(2) | 7.3 | 5.8 | 16.6 | 9.8 | |||||||||||||||||||
| Adjusted net income (non-GAAP) | $ | 183.3 | $ | 184.8 | $ | 594.3 | $ | 556.9 | |||||||||||||||
(1) Included immaterial amounts of Argentine interest income for periods presented. | |||||||||||||||||||||||
(2) Included net tax expense of approximately $5 related to the impact of certain tax law changes in a foreign jurisdiction for the nine months ended September 30, 2026. | |||||||||||||||||||||||
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A-5
(continued)
AVERY DENNISON CORPORATION
PRELIMINARY RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FROM GAAP
(In millions, except % and per share amounts)
| (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Sep. 30, 2026 | Sep. 27, 2025 | Sep. 30, 2026 | Sep. 27, 2025 | ||||||||||||||||||||
| Reconciliation of adjusted net income per common share from GAAP: | |||||||||||||||||||||||
| Net income per common share, assuming dilution | $ | 2.24 | $ | 2.13 | $ | 7.09 | $ | 6.64 | |||||||||||||||
Adjustments per common share: | |||||||||||||||||||||||
| Restructuring charges and other items | 0.12 | 0.21 | 0.63 | 0.47 | |||||||||||||||||||
| Tax effect on restructuring charges and other items | (0.04) | (0.05) | (0.16) | (0.14) | |||||||||||||||||||
| Impact of adjusted tax rate | 0.10 | 0.08 | 0.22 | 0.12 | |||||||||||||||||||
| Adjusted net income per common share, assuming dilution (non-GAAP) | $ | 2.42 | $ | 2.37 | $ | 7.78 | $ | 7.09 | |||||||||||||||
| Weighted average number of common shares outstanding, assuming dilution | 75.9 | 78.0 | 76.4 | 78.6 | |||||||||||||||||||
| Our adjusted tax rate was 26.9% for both the three and nine months ended September 30, 2026, and 26.5% and 26.2% for the three and nine months ended September 27, 2025, respectively. | |||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Sep. 30, 2026 | Sep. 27, 2025 | Sep. 30, 2026 | Sep. 27, 2025 | ||||||||||||||||||||
| Reconciliation of adjusted free cash flow from GAAP: | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 298.8 | $ | 312.1 | $ | 843.5 | $ | 504.6 | |||||||||||||||
| Purchases of property, plant and equipment | (47.6) | (35.9) | (115.1) | (101.9) | |||||||||||||||||||
| Purchases of software and other deferred charges | (6.6) | (7.7) | (20.5) | (22.9) | |||||||||||||||||||
| Proceeds from sales of property, plant and equipment | 1.2 | 4.5 | 1.9 | 20.2 | |||||||||||||||||||
| Proceeds from insurance and sales (purchases) of investments, net | 0.2 | (4.3) | 6.0 | 4.5 | |||||||||||||||||||
| Adjusted free cash flow (non-GAAP) | $ | 246.0 | $ | 268.7 | $ | 715.8 | $ | 404.5 | |||||||||||||||
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A-6
AVERY DENNISON CORPORATION
PRELIMINARY SUPPLEMENTARY INFORMATION
(In millions, except %)
(UNAUDITED)
| NET SALES | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Sep. 30, 2026 | Sep. 27, 2025 | Sep. 30, 2026 | Sep. 27, 2025 | ||||||||||||||||||||
| Materials Group | $ | 1,644.5 | $ | 1,516.0 | $ | 5,089.9 | $ | 4,546.3 | |||||||||||||||
| Solutions Group | 687.0 | 699.5 | 2,003.0 | 2,038.0 | |||||||||||||||||||
| Total net sales | $ | 2,331.5 | $ | 2,215.5 | $ | 7,092.9 | $ | 6,584.3 | |||||||||||||||
| RECONCILIATION OF NON-GAAP SUPPLEMENTARY INFORMATION FROM GAAP | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Sep. 30, 2026 | Sep. 27, 2025 | Sep. 30, 2026 | Sep. 27, 2025 | ||||||||||||||||||||
| Materials Group | |||||||||||||||||||||||
| Operating income | $ | 225.3 | $ | 216.5 | $ | 751.9 | $ | 691.9 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Restructuring charges, net of reversals: | |||||||||||||||||||||||
| Severance and related costs, net of reversals | 4.8 | 2.7 | 13.6 | 7.7 | |||||||||||||||||||
| Asset impairment and lease cancellation charges | --- | 1.8 | 0.6 | 1.8 | |||||||||||||||||||
| Loss from Argentine peso remeasurement | 0.5 | 1.9 | 1.8 | 4.4 | |||||||||||||||||||
| (Gain) loss on venture and other investments | 0.1 | 2.2 | 0.8 | 3.2 | |||||||||||||||||||
| (Gain) loss on sales of assets | 0.4 | --- | 0.3 | (11.1) | |||||||||||||||||||
| Outcomes of legal matters and settlements | --- | 3.0 | 0.2 | 3.0 | |||||||||||||||||||
| Transaction and related costs | --- | 2.0 | 0.1 | 2.0 | |||||||||||||||||||
| Adjusted operating income (non-GAAP) | $ | 231.1 | $ | 230.1 | $ | 769.3 | $ | 702.9 | |||||||||||||||
| Depreciation and amortization | 37.8 | 34.8 | 115.1 | 99.3 | |||||||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 268.9 | $ | 264.9 | $ | 884.4 | $ | 802.2 | |||||||||||||||
| Operating margins | 13.7 | % | 14.3 | % | 14.8 | % | 15.2 | % | |||||||||||||||
| Adjusted operating margins (non-GAAP) | 14.1 | % | 15.2 | % | 15.1 | % | 15.5 | % | |||||||||||||||
| Adjusted EBITDA margins (non-GAAP) | 16.4 | % | 17.5 | % | 17.4 | % | 17.6 | % | |||||||||||||||
| Solutions Group | |||||||||||||||||||||||
| Operating income | $ | 72.0 | $ | 68.2 | $ | 179.9 | $ | 186.1 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Restructuring charges, net of reversals: | |||||||||||||||||||||||
| Severance and related costs, net of reversals | 3.2 | 4.8 | 24.9 | 11.7 | |||||||||||||||||||
| Asset impairment and lease cancellation charges | 0.3 | 0.4 | 3.4 | 0.7 | |||||||||||||||||||
| (Gain) loss on venture and other investments | (1.1) | (3.5) | 0.7 | 6.6 | |||||||||||||||||||
| Outcomes of legal matters and settlements | --- | 0.2 | 0.5 | 0.2 | |||||||||||||||||||
| (Gain) loss on sales of assets | --- | (0.4) | --- | (0.4) | |||||||||||||||||||
| Adjusted operating income (non-GAAP) | $ | 74.4 | $ | 69.7 | $ | 209.4 | $ | 204.9 | |||||||||||||||
| Depreciation and amortization | 47.8 | 49.2 | 143.7 | 143.4 | |||||||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 122.2 | $ | 118.9 | $ | 353.1 | $ | 348.3 | |||||||||||||||
| Operating margins | 10.5 | % | 9.7 | % | 9.0 | % | 9.1 | % | |||||||||||||||
| Adjusted operating margins (non-GAAP) | 10.8 | % | 10.0 | % | 10.5 | % | 10.1 | % | |||||||||||||||
| Adjusted EBITDA margins (non-GAAP) | 17.8 | % | 17.0 | % | 17.6 | % | 17.1 | % | |||||||||||||||
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A-7
AVERY DENNISON CORPORATION
PRELIMINARY SUPPLEMENTARY INFORMATION
(In millions, except ratios)
(UNAUDITED)
| QTD | ||||||||||||||
| 4Q25 | 1Q26 | 2Q26 | 3Q26 | |||||||||||
| Reconciliation of adjusted EBITDA from GAAP: | ||||||||||||||
| Net income | $ | 166.4 | $ | 168.1 | $ | 204.1 | $ | 169.7 | ||||||
| Other expense (income), net | 40.4 | 17.8 | 21.1 | 9.6 | ||||||||||
| Interest expense | 37.2 | 35.6 | 35.9 | 35.7 | ||||||||||
| Other non-operating expense (income), net | (3.9) | (4.1) | (5.1) | (4.4) | ||||||||||
| Provision for income taxes | 41.4 | 72.3 | 78.6 | 71.5 | ||||||||||
| Depreciation and amortization | 85.5 | 86.8 | 86.4 | 85.6 | ||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 367.0 | $ | 376.5 | $ | 421.0 | $ | 367.7 | ||||||
| Total Debt | $ | 3,615.0 | ||||||||||||
| Less: Cash and cash equivalents | 271.4 | |||||||||||||
| Net Debt | $ | 3,343.6 | ||||||||||||
| Net Debt to Adjusted EBITDA LTM* (non-GAAP) | 2.2 | |||||||||||||
| *LTM = Last twelve months (4Q25 through 3Q26) | ||||||||||||||
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A-8
AVERY DENNISON CORPORATION
PRELIMINARY SUPPLEMENTARY INFORMATION
(UNAUDITED)
| Three Months Ended | |||||||||||
| Sep. 30, 2026 | |||||||||||
| Total Company | Materials Group | Solutions Group | |||||||||
| Reconciliation of organic sales change from GAAP: | |||||||||||
| Net sales change | 5.2% | 8.5% | (1.8)% | ||||||||
| Reclassification of sales between segments | --- | (1.4)% | 2.8% | ||||||||
| Foreign currency translation | (0.3)% | (0.3)% | (0.2)% | ||||||||
Sales change ex. currency (non-GAAP)(1) | 4.9% | 6.7% | 0.8% | ||||||||
| Acquisitions | (1.3)% | (1.8)% | --- | ||||||||
Organic sales change (non-GAAP)(1) | 3.7% | 4.9% | 0.8% | ||||||||
(1) Totals may not sum due to rounding. | |||||||||||
| Nine Months Ended | |||||||||||
| Sep. 30, 2026 | |||||||||||
| Total Company | Materials Group | Solutions Group | |||||||||
| Reconciliation of organic sales change from GAAP: | |||||||||||
| Net sales change | 7.7% | 12.0% | (1.7)% | ||||||||
| Reclassification of sales between segments | --- | (1.5)% | 3.2% | ||||||||
| Foreign currency translation | (2.3)% | (3.2)% | (0.7)% | ||||||||
Sales change ex. currency (non-GAAP)(1) | 5.4% | 7.3% | 0.8% | ||||||||
| Acquisitions | (1.2)% | (1.8)% | --- | ||||||||
Organic sales change (non-GAAP)(1) | 4.1% | 5.5% | 0.8% | ||||||||
(1) Totals may not sum due to rounding. | |||||||||||
Classification: Avery Dennison - Public 1High-Value Category Investor Showcase 2026 Third Quarter 2026 Financial Review and Analysis (preliminary, unaudited) October 29, 2026 Supplemental Presentation Materials Unless otherwise indicated, comparisons are to the same period in the prior year.
2October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other business targets, are subject to certain risks and uncertainties. We believe that the most significant risk factors that could affect our financial performance in the near term include: (i) the impact on underlying demand for our products from global economic conditions, tariffs, geopolitical uncertainty, and changes in environmental standards, regulations and preferences; (ii) competitors’ actions, including pricing, expansion in key markets, and product offerings; (iii) the cost and availability of raw materials; (iv) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through price increases, without a significant loss of volume; (v) foreign currency fluctuations; and (vi) the execution and integration of acquisitions. Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but not limited to, risks and uncertainties related to the following: ● International Operations – worldwide economic, social, geopolitical and market conditions; changes in geopolitical conditions, including those related to trade relations and tariffs, China, recent conflicts involving the U.S., Israel and Iran and related hostilities in the Middle East, the Russia-Ukraine war, and the Israel-Hamas war; fluctuations in foreign currency exchange rates; and other risks associated with international operations, including in emerging markets ● Our Business – fluctuations in demand affecting sales to customers; fluctuations in the cost and availability of raw materials and energy; changes in our markets due to competitive conditions, technological developments, laws and regulations, and customer preferences; environmental regulations and sustainability trends; the impact of competitive products and pricing; the execution and integration of acquisitions; selling prices; customer and supplier concentrations or consolidations; the financial condition of distributors; outsourced manufacturers; product and service quality claims; restructuring and other cost reduction actions; our ability to generate sustained productivity improvement and our ability to achieve and sustain targeted cost reductions; the timely development and market acceptance of new products, including sustainable or sustainably-sourced products; our investment in development activities and new production facilities; the collection of receivables from customers; and our sustainability and governance practices ● Information Technology – disruptions in information technology systems; cybersecurity events or other security breaches; and successful installation of new or upgraded information technology systems ● Income Taxes – fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; outcome of tax audits; and the realization of deferred tax assets ● Human Capital – recruitment and retention of employees and collective labor arrangements ● Our Indebtedness – our ability to obtain adequate financing arrangements and maintain access to capital; credit rating risks; fluctuations in interest rates; and compliance with our debt covenants ● Ownership of Our Stock – potential significant variability of our stock price and amounts of future dividends and share repurchases ● Legal and Regulatory Matters – protection and infringement of our intellectual property and the impact of legal and regulatory proceedings, including with respect to anti-corruption, environmental, health and safety, and trade compliance ● Other Financial Matters – fluctuations in pension costs and goodwill impairment For a more detailed discussion of these factors, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K, filed with the Securities and Exchange Commission on February 25, 2026, and subsequent quarterly reports on Form 10-Q. The forward-looking statements included in this document are made only as of the date of this document, and we undertake no obligation to update these statements to reflect subsequent events or circumstances, other than as may be required by law. Safe Harbor Statement
3October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Use of Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures as defined by SEC rules. We report our financial results in conformity with accounting principles generally accepted in the United States of America, or GAAP, and also communicate with investors using certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. These non-GAAP financial measures are intended to supplement the presentation of our financial results prepared in accordance with GAAP. We use these non-GAAP financial measures internally to evaluate trends in our underlying performance, as well as to facilitate comparisons with the results of competitors for quarters and year-to-date periods, as applicable. Based on feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are also useful to their assessments of our performance and operating trends, as well as liquidity. In accordance with Regulations G and S-K, reconciliations of non-GAAP financial measures from the most directly comparable GAAP financial measures, including limitations associated with these non-GAAP financial measures, are provided in the appendix to this document and/or the financial schedules accompanying the earnings news release for the quarter (see Attachments A-4 through A-8 to news release dated October 29, 2026). Our non-GAAP financial measures exclude the impact of certain events, activities or strategic decisions. The accounting effects of these events, activities or decisions, which are included in the GAAP financial measures, may make it more difficult to assess our underlying performance in a single period. By excluding the accounting effects, positive or negative, of certain items (e.g., restructuring charges, outcomes of certain legal matters and settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, gains or losses from curtailment or settlement of pension obligations, gains or losses on sales of certain assets, gains or losses on venture and other investments, currency adjustments due to highly inflationary economies, and other items), we believe that we are providing meaningful supplemental information that facilitates an understanding of our core operating results and liquidity measures. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency or timing. We use the non-GAAP financial measures described below in this presentation. • Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, currency adjustments for transitional reporting of highly inflationary economies and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for the estimated impact of extra days in our fiscal year and the calendar shift resulting from extra days in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current-period average exchange rates to exclude the effect of foreign currency fluctuations. Our 2025 fiscal year began on December 29, 2024 and ended on December 31, 2025; fiscal years 2026 and beyond are coincident with the calendar year, beginning on January 1 and ending on December 31. • Organic sales change refers to sales change ex. currency, excluding the estimated impact of acquisitions and product line divestitures. We believe that sales change ex. currency and organic sales change assist investors in evaluating the sales change from the ongoing activities of our businesses and enhance their ability to evaluate our results from period to period. We believe that the following measures assist investors in understanding our core operating trends and comparing our results with those of our competitors. • Adjusted operating income refers to net income adjusted for taxes; other expense (income), net; interest expense; and other non-operating expense (income), net. • Adjusted EBITDA refers to adjusted operating income before depreciation and amortization. • Adjusted operating margin refers to adjusted operating income as a percentage of net sales. • Adjusted EBITDA margin refers to adjusted EBITDA as a percentage of net sales. • Adjusted tax rate refers to the projected full-year GAAP tax rate, adjusted to exclude certain unusual or infrequent events that are expected to significantly impact that rate, such as effects of certain discrete tax planning actions, impacts related to enactments of tax law changes, and other items. • Adjusted net income refers to income before taxes, tax-effected at the adjusted tax rate, and adjusted for tax-effected restructuring charges and other items. • Adjusted net income per common share, assuming dilution (adjusted EPS) refers to adjusted net income divided by the weighted average number of common shares outstanding, assuming dilution. • Net debt to adjusted EBITDA ratio refers to total debt (including finance leases) less cash and cash equivalents, divided by adjusted EBITDA for the last twelve months. We believe that the net debt to adjusted EBITDA ratio assists investors in assessing our leverage position. • Adjusted free cash flow (FCF) refers to cash flow provided by (used in) operating activities, less payments for property, plant and equipment, less payments for software and other deferred charges, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from insurance and sales (purchases) of investments. Where applicable, adjusted free cash flow is also adjusted for certain acquisition-related transaction costs, proceeds from company-owned life insurance policies and net cash used for Argentine Blue Chip Swap securities. We believe that adjusted free cash flow assists investors by showing the amount of cash we have available for debt reductions, dividends, share repurchases and acquisitions. • Adjusted free cash flow conversion refers to adjusted free cash flow divided by net income. We believe this measure assists investors in evaluating how efficiently we convert our net income into adjusted free cash flow. This presentation has been furnished (not filed) on Form 8-K with the SEC and may be found on our website at www.investors.averydennison.com.
4October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Continued to deliver strong sales, earnings and cash flow Third Quarter Results Net sales of $2.3 bil. ● Organic sales growth (non-GAAP) of 3.7% ○ Includes ~2 pt impact of destocking, roughly half of what was anticipated for Q3 ● Sales change ex. currency (non-GAAP) up 4.9% Reported operating income of $273 mil. ● Adj. EBITDA margin (non-GAAP) of 15.8%, down 70 bps ● Adj. operating margin (non-GAAP) of 12.1%, down 60 bps Reported EPS of $2.24 ● Adjusted EPS (non-GAAP) of $2.42, up 2% ○ Includes an estimated 6% impact of destocking Cash flow & capital allocation ● Adj. FCF (non-GAAP) of $246 mil., $716 mil. YTD ● Returned $481 mil. to shareholders in first nine months through share repurchases and growing dividends ● Net debt to adj. EBITDA ratio (non-GAAP) of 2.2 Strength & Durability of Franchise ● High-value categories (HVC) up mid-single digits on an organic basis ● Base categories up mid-single digits on an organic basis ● Continuing to deliver strong productivity ● Leveraging playbook to mitigate inflationary pressures ● Strong balance sheet and robust cash flow generation FY 2026 Outlook ● Expect Adj. EPS of $10.10 to $10.24 ● Assumes vast majority of the remaining customer inventory stocking from first half of year will largely unwind in Q4 ● Expect ~3.5% organic sales growth ● Estimate 1.5% year-over-year sales headwind in Q4 from calendar shift
5October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Underlying performance of the business has improved 2H25 includes the impact of the extra days 1H25 2H25 1Q26 2Q26 3Q26 Organic Sales Growth 1% 0% 1% 8% 4% Key factors of organic sales growth: Estimated customer inventory mgmt ~1% ~4% ~(2)% Underlying performance 1% 0% ~0% ~4% ~6% 1H25 2H25 1Q26 2Q26 3Q26 Adjusted EPS Growth 0% 2% 7% 19% 2% Key factors of adjusted EPS growth: Estimated customer inventory mgmt ~2% ~11% ~(6)% Underlying performance 0% 2% ~5% ~8% ~8%
6October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public 2025 Sales by Product ■ Label Materials ■ Graphics & Reflective ■ Performance Materials ■ Other 2025 Sales Estimate by End Market ■ U.S. & Canada ■ Western Europe ■ E. Europe & MENA ■ Asia Pacific ■ Latin America High-value Categories 38% Third Quarter 2026 Results Materials Group Reported sales increased 8.5% to $1.6 bil. Sales up 4.9% organically ● High-value categories up mid-single digits ● Base categories up mid-single digits ● Volume/mix growth of low single digits and price benefit of mid-single digits Reported operating margin of 13.7% ● Adj. operating margin of 14.1%, down 110 bps ● Adj. EBITDA margin of 16.4%, down 110 bps ○ Productivity was more than offset by negative volume/mix and higher employee-related costs Emerging Markets 39%
7October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public 2025 Sales by Product ■ Base Solutions ■ Intelligent Labels ■ Vestcom ■ Embelex 2025 Sales Estimate by End Market ■ U.S. & Canada ■ Europe ■ Asia Pacific ■ Latin America High-value Categories 60% Third Quarter 2026 Results Solutions Group Reported sales decreased 1.8% to $687 mil. Sales up 0.8% organically ● High-value categories comparable to prior year, including a headwind from logistics IL ● Base categories up low single digits ● Overall apparel categories up mid-single digits Reported operating margin of 10.5% ● Adj. operating margin of 10.8%, up 80 bps ● Adj. EBITDA margin of 17.8%, up 80 bps ○ Productivity was partially offset by higher employee-related costs
8October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Solutions Group HVC ■ SG Intelligent labels ■ Vestcom ■ Embelex Materials Group HVC ■ Specialty & Durable Labels ■ Graphics & Reflective ■ Performance Materials ■ MG Intelligent labels Overall Results Q3 sales up mid-single digits on organic basis; continuing to outpace global GDP Materials Group: ● Specialty & Durables up high single digits ● Performance materials up mid-single digits ● Graphics & Reflectives up low single digits Solutions Group: ● Embelex mid-single digit growth despite lapping World Cup ● Vestcom up low single digits Enterprise IL: ● Low single digit growth; solid gains in apparel, general retail and growth in food offsets weakness in logistics Growth driven by delivering innovative, premium margin solutions in attractive growth end markets ~$4 bil. 45% of total company sales 2025 Sales by High-Value Category High-value category portfolio continues to demonstrate strong growth
9October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Enterprise-wide Intelligent Labels 2025 Sales by CategoryOverall Results Q3 sales up low single digits on organic basis ● Apparel and general retail up ~10% on apparel program expansions and recovery in general retail ● Food and logistics down mid-teens; accelerating growth in food more than offset by soft logistics customer demand and lapping outsized share gains in 2025 Key End Segment Insights ● Apparel and general retail: Expect growth to continue, driven by apparel new program expansions and general retail recovery ● Food: Anticipate acceleration in the category; new grocery customer ramping and expanding pilots; continuing to move towards commercialization with largest U.S. grocery retailer ● Logistics: Expanding pilots with additional customers Apparel Food & Logistics All Other General merch. $0.9B
10October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Low High Reported EPS $9.45 $9.59 Est. restructuring costs & other items ~$0.65 ~$0.65 Adjusted EPS $10.10 $10.24 FY 2026 EPS Guidance For FY 2026, anticipate adj. EPS of $10.10-$10.24 ● Reported sales growth of ~5.5% and organic sales growth of ~3.5% ○ ~1.5% benefit from currency translation, ~1% benefit from prior-year acquisition, and 0.4% headwind from the calendar adjustment (~1.5% Q4 headwind) Additional full-year considerations ● ~$0.30 net EPS tailwind from benefits of currency translation and lower share count, partially offset by higher adjusted tax rate and interest expense ● Incremental savings of >$65 mil. from restructuring actions (previously >$60 mil.) ● Majority of 2025 temporary savings, largely incentive compensation, remains a headwind ● Targeting 100%+ adj. FCF conversion (non-GAAP); fixed and IT capital spend of ~$240 mil. (previously ~$260 mil.) ● Assumes vast majority of remaining customer inventory destocking occurs in Q4
Classification: Avery Dennison - Public 11September 18, 2024 Avery Dennison 2024 Investor Day Appendix Summary Information & Reconciliation of Non-GAAP Financial Measures from GAAP
12October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Source: S&P Global Market Intelligence U.S. Consumer Sentiment Economic Conditions Dashboard 2020 2021 2022 2023 2024 2025 2026 Oct‘26 Outlook and Change vs. Jan‘26 Outlook Source: University of Michigan Real GDP Retail volume CPI Fcst. Chg. Fcst. Chg. Fcst. Chg. U.S. 2.4% 0.1% 1.3% 0.2% 3.4% 0.9% Europe 1.4% 0.0% 0.7% 0.0% 4.4% 1.2% APAC 4.3% 0.3% 1.4% (2.0)% 2.8% 1.2% Latin Am. 2.0% (0.2)% 1.3% (0.1)% 6.9% 0.6% World 2.6% (0.1)% 1.1% (0.5)% 3.9% 1.0%
13October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Third quarter 2026 sales change Total Company Materials Group Solutions Group Net sales change 5.2% 8.5% (1.8)% Reclass. of sales between segments - (1.4)% 2.8% Foreign currency translation (0.3)% (0.3)% (0.2)% Sales change ex. currency 4.9% 6.7% 0.8% Acquisitions (1.3)% (1.8)% - Organic sales change 3.7% 4.9% 0.8% (1) Totals may not sum due to rounding (1) (1)
14October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Quarterly sales trend analysis 3Q25 4Q25 1Q26 2Q26 3Q26 Net sales change 1.5% 3.9% 7.0% 10.9% 5.2% Foreign currency translation (1.7)% (1.7)% (4.7)% (2.0)% (0.3)% Impact of extra days - (1.5)% - - - Sales change ex. currency (0.2)% 0.6% 2.3% 8.9% 4.9% Acquisitions - (0.8)% (1.2)% (1.3)% (1.3)% Organic sales change (0.2)% (0.2)% 1.1% 7.6% 3.7% Materials Group organic sales change (1.9)% (0.9)% 1.9% 9.7% 4.9% Solutions Group organic sales change 3.6% 1.3% (0.9)% 2.6% 0.8% (1) Totals may not sum due to rounding (1) (1)
15October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Third quarter 2026 margin comparisons Reported Operating Margin Adjusted Operating Margin Adjusted EBITDA Margin 3Q26 3Q25 3Q26 3Q25 3Q26 3Q25 Materials Group 13.7% 14.3% 14.1% 15.2% 16.4% 17.5% Solutions Group 10.5% 9.7% 10.8% 10.0% 17.8% 17.0% Total Company 11.7% 11.9% 12.1% 12.7% 15.8% 16.5%
16October 29, 2026 Preliminary & unaudited Q3 2026 financial review and analysis Classification: Avery Dennison - Public Est. 2025 Sales by End Market Industrial/ Durable Apparel Broad exposure to diverse markets across portfolio 60%+ Staples Non- durable Goods Logistics $8.9B 2025 Sales by Manufacturing Location U.S. & Canada Western Europe China Other Asia-Pac Latin Am. EE M EN A
Classification: Avery Dennison - Public 17High-Value Category Investor Showcase 2026 © 2026 Avery Dennison Corporation. All rights reserved. The “Making Possible” tagline, Avery Dennison and all other Avery Dennison brands, product names and codes are trademarks of Avery Dennison Corporation. All other brands or product names are trademarks of their respective owners. Fortune 500® is a trademark of Time, Inc. Branding and other information on any samples depicted are fictitious. Any resemblance to actual names is purely coincidental. #MakingPossible averydennison.com
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