Avery Dennison (AVY) Q4 2025 earnings summary

Executive summary

• FY25 adjusted EPS reached $9.53, up 1% year-over-year, with adjusted free cash flow of $707 million, reflecting resilience amid trade policy changes, tariffs, and softer consumer sentiment.

• Q4 adjusted EPS was $2.45, up 3% year-over-year, with net sales of $2.3 billion, up 4%, driven by higher volume and productivity, partially offset by higher employee-related costs and growth investments.

• High-value categories now represent 45% of sales/revenue, growing at a mid-single-digit CAGR since 2019, with significant innovation in Intelligent Labels and software platforms.

• Achieved 2025 sustainability objectives and made progress toward 2030 goals.

• Balanced capital allocation, returning $861 million to shareholders and expanding high-value category exposure through strategic acquisitions.

Financial highlights

• Full-year net sales reached $8.9 billion, up 1% from the prior year, with organic sales up 0.2%; Q4 net sales were $2.3 billion, up 4%.

• Adjusted EBITDA margin for FY25 was 16.4%; Q4 adjusted EBITDA margin was 16.2%.

• Adjusted free cash flow for 2025 was $707 million, with a conversion rate above 100%.

• Net debt to adjusted EBITDA ratio at year-end was 2.4.

• Returned $861 million to shareholders in 2025, including dividends and share repurchases.

Outlook and guidance

• Q1 2026 adjusted EPS guidance is $2.40 to $2.46, with organic sales growth of 0–2% and reported sales growth of 5–7%.

• Full-year 2026 guidance includes $0.25 EPS benefit from currency and lower share count, offset by higher tax and interest; restructuring savings of ~$50 million expected.

• Anticipate sequential earnings growth through 2026, with Walmart food rollout ramping in H2 and continued focus on productivity and innovation.

• Targeting ~100% adjusted free cash flow conversion and fixed/IT capital spend of ~$260 million.