Avery Dennison (AVY) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2 2026 results with adjusted EPS of $2.89, up 19% year-over-year, and organic sales growth of 8%.

• Net sales reached $2.5 billion, with robust adjusted free cash flow of $365 million.

• Customer inventory pre-buys contributed significantly to results, accounting for about half of organic sales growth and $0.25 of EPS.

• Growth was balanced across base and high-value categories, with innovation and operational agility driving performance.

• Returned $347 million to shareholders year-to-date through share repurchases and dividends.

Financial highlights

• Q2 2026 adjusted EPS was $2.89, up 19% year-over-year; adjusted EBITDA margin expanded to 17.1%, up 50 bps.

• Net sales increased 10.9% year-over-year to $2.5 billion; organic sales growth was 7.6%-8%.

• Adjusted free cash flow for Q2 was $365 million, nearly doubling year-over-year.

• Returned over $210 million to shareholders in Q2 via dividends and share repurchases; $347 million year-to-date.

• Net debt to adjusted EBITDA ratio at quarter end: 2.3x.

Outlook and guidance

• Full-year 2026 adjusted EPS expected at $10.00–$10.30, representing 7% growth at midpoint.

• Anticipates 3%-4% organic sales growth and 5%-6% reported sales growth for 2026.

• Majority of customer inventory destocking expected in Q3, leading to a sequential earnings decline of ~$0.50.

• Expects high single-digit year-over-year raw material inflation in the second half.

• Targeting ~100% adjusted free cash flow conversion; capital spend of ~$260 million.