Avery Dennison (AVY) Q2 2024 earnings summary

Executive summary

• Q2 2024 adjusted EPS rose 26% to $2.42, with reported EPS up 76% to $2.18, and net sales increased 7% year-over-year to $2.2 billion, driven by higher volume and productivity gains.

• Full-year adjusted EPS guidance was raised to $9.30–$9.50, targeting approximately 19–20% earnings growth versus prior year.

• Both Materials and Solutions Groups delivered strong top- and bottom-line growth, with double-digit sales growth and margin expansion.

• Intelligent Labels platform achieved mid- to high-teens organic sales growth year-to-date, targeting over 20% volume growth for 2024, with strong adoption in apparel and new categories.

• Strong adjusted free cash flow generation and disciplined capital deployment continued, with $201 million in adjusted free cash flow in H1 2024.

Financial highlights

• Q2 2024 net sales reached $2.24 billion, up 7% year-over-year; organic sales up 7–8% and sales ex-currency up 8%.

• Adjusted EBITDA for Q2 was $367.4 million (16.4% margin), up 19% year-over-year and 5% sequentially.

• Q2 2024 net income was $176.8 million, up 76% from prior year; adjusted net income was $196.0 million, up 26%.

• Adjusted free cash flow for H1 2024 totaled $201 million, up $137 million year-over-year.

• Returned $177 million to shareholders in H1 2024 via dividends and share repurchases; dividend rate increased by 9% in April.

Outlook and guidance

• Full-year 2024 adjusted EPS guidance raised to $9.30–$9.50, reflecting 19% growth at the midpoint despite a $0.05–$10 million currency headwind.

• Organic sales growth for 2024 estimated at 4.5%, with high single-digit volume growth expected.

• Q3 EPS expected to follow historical seasonal pattern with a mid-single-digit sequential decline from Q2.

• Incremental restructuring savings for 2024 expected to exceed $50 million.

• Margin improvement expected to continue in the second half of 2024.