Avery Dennison tops Q3 profit estimates and narrows 2026 forecast

Avery Dennison Corporation (AVY) topped profit estimates for the third quarter of 2026, reporting adjusted earnings per share of $2.42 in a press release furnished to the Securities and Exchange Commission on Oct. 29, 2026.

The adjusted figure beat the $2.35 consensus estimate compiled by Finnhub. Revenue of $2.33 billion was above the $2.29 billion estimate. The company also narrowed its full-year adjusted EPS forecast.

The results are preliminary and unaudited. The company will discuss them on a webcast and teleconference at 11:00 a.m. ET on Oct. 29, 2026.

Avery Dennison is a global materials science and digital identification solutions company. It employs about 35,000 people in more than 50 countries and reported 2025 sales of $8.9 billion.

Here's how the company did:

• Adjusted EPS: $2.42 vs. $2.37 a year earlier, and $2.35 expected, according to Finnhub
• Reported EPS: $2.24 vs. $2.13 a year earlier
• Revenue: $2,331.5 million vs. $2,215.5 million a year earlier, and $2.29 billion expected, according to Finnhub
• Adjusted operating income: $282.1 million vs. $281.1 million a year earlier
• Adjusted EBITDA: $367.7 million vs. $365.1 million a year earlier

Net sales rose 5.2% from a year earlier on a reported basis and 3.7% on an organic basis. The company said organic growth included about 2 percentage points of customer destocking, roughly half of what it had anticipated for the quarter.

"We delivered another quarter of strong results, highlighted by continued improvement in our underlying organic sales and earnings growth," said Deon Stander, president and CEO.

Segment results

Materials Group sales were $1,644.5 million, up 8.5% from a year earlier, with organic growth of 4.9%. Its adjusted operating margin was 14.1%, down 110 basis points.

The company said productivity was more than offset by negative volume and mix and higher employee-related costs in the segment.

Solutions Group sales were $687 million, down 1.8% on a reported basis and up 0.8% organically. Its adjusted operating margin rose 80 basis points to 10.8%.

In that segment, productivity was partially offset by higher employee-related costs, the company said.

2026 guidance

The company expects full-year 2026 reported EPS of $9.45 to $9.59. In its previous results release on July 30, 2026, it gave a reported EPS range of $9.40 to $9.70.

It expects full-year 2026 adjusted EPS of $10.10 to $10.24, excluding an estimated $0.65 impact of restructuring charges and other items. The earlier adjusted range was $10.00 to $10.30.

The company assumes most of the remaining customer inventory stocking from the first half of the year will unwind in the fourth quarter. It expects organic sales growth of about 3.5% for the year and estimates a 1.5% sales headwind in the fourth quarter from a calendar shift.

Revenue has risen in each of the last three quarters, from $2.22 billion in the third quarter of 2025 to $2.46 billion in the second quarter of 2026, according to its SEC filings.

Cash and capital returns

During the first three quarters of 2026, the company returned $481 million to shareholders through share repurchases and dividends. It bought back 1.5 million shares for $257 million.

Net of dilution, its share count at the end of the third quarter was down 1.9 million from the same time a year earlier. Net debt to adjusted EBITDA was 2.2 times at the end of the quarter.

Adjusted free cash flow was $246.0 million in the quarter, compared with $268.7 million a year earlier. Year to date, it was $715.8 million, up from $404.5 million.

Restructuring and taxes

Through the first three quarters, the company realized about $54 million in pre-tax savings from restructuring actions and incurred about $43 million in pre-tax restructuring charges. It now expects incremental savings of more than $65 million from those actions, up from more than $60 million previously.

The company's reported effective tax rate was 29.6% for the quarter. Its adjusted tax rate was 26.9%.

The company said in its filing that it is targeting adjusted free cash flow conversion of 100% or more and fixed and IT capital spending of about $240 million, down from about $260 million previously.