Avery Dennison (AVY) Q4 2025 earnings summary

Executive summary

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

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

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

• Balanced capital allocation, returning $861M to shareholders and expanding high-value category exposure through the $390M Taylor Adhesives acquisition.

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

Financial highlights

• Full-year net sales reached $8.9B, up 0.2% organically; Q4 net sales were $2.3B, up 4% reported, down 0.2% organically.

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

• Adjusted free cash flow for the year was $707M, with conversion above 100%.

• Returned $861M to shareholders in 2025 via buybacks and dividends.

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

Outlook and guidance

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

• Full-year 2026 guidance includes 5%-7% reported sales growth, with ~4% currency tailwind and ~1% from Taylor Adhesives.

• Sequential earnings increase expected throughout 2026, with Walmart food rollout ramping in H2.

• Targeting ~100% adjusted free cash flow conversion and CapEx of ~$260M.

• No macroeconomic tailwinds assumed; growth to be driven by internal levers and high-value categories.