Avery Dennison Reports Q4 Net Income Decline Despite Sales Increase
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Should l Buy AVY?
Source: NASDAQ.COM
- Net Income Decline: Avery Dennison reported a net income of $166.4 million for Q4, down from $174 million last year, indicating challenges in cost management despite increased sales.
- Slight EPS Drop: The earnings per share stood at $2.15, a slight decrease from $2.16 year-over-year, reflecting a minor weakening in profitability, although adjusted EPS increased.
- Sales Growth: The company achieved net sales of $2.27 billion in Q4, up from $2.19 billion the previous year, indicating strong market demand, yet this did not translate into improved net income.
- Future Outlook: Avery Dennison expects Q1 2026 earnings per share to range between $2.27 and $2.33, demonstrating cautious optimism for future performance despite current profitability pressures.
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Analyst Views on AVY
Wall Street analysts forecast AVY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AVY is 205.38 USD with a low forecast of 188.00 USD and a high forecast of 234.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 191.510
Low
188.00
Averages
205.38
High
234.00
Current: 191.510
Low
188.00
Averages
205.38
High
234.00
About AVY
Avery Dennison Corporation is a global materials science and digital identification solutions company. The Company provides a range of branding and information solutions that optimize labor and supply chain efficiency, reduce waste, advance sustainability, circularity and transparency, and connect brands and consumers. Its Materials Group segment manufactures and sells pressure-sensitive label materials, films for graphic and reflective products, performance tapes and other adhesive products for industrial, medical and other applications, as well as fastener solutions. Its Solutions Group segment designs, manufactures and sells a variety of branding and information solutions, including brand and price tickets, tags and labels (including radio-frequency identification (RFID) inlays), and related services, supplies and equipment. It serves an array of industries worldwide, including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Avery Dennison (AVY) Q4 2025 Earnings Transcript
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- Live Webcast Access: Investors can access the live webcast by visiting the company's dedicated events page, ensuring transparency and enhancing engagement with stakeholders during the earnings discussion.
- Importance of Information Disclosure: This call will provide critical financial data and strategic updates, helping market participants better understand the company's operational status and future growth trajectory amidst current economic conditions.
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- Significant Shareholder Returns: In Q4, Avery returned $191 million to shareholders through dividends and share repurchases, with total shareholder returns for the year reaching $861 million, highlighting the company's ongoing commitment to its investors.
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Company Update: A Very Denison Corp has announced a change in its target price.
Target Price Adjustment: The new target price is set at $224, an increase from the previous $215.
See More
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- Strong Financial Performance: Avery Dennison reported adjusted earnings per share of $2.45 for Q4 2025, a 3% increase year-over-year, alongside $303 million in free cash flow, culminating in a total of $707 million for the year, demonstrating resilience amid economic uncertainties.
- Growth in High-Value Categories: The Materials Group saw a 5% sales increase, with high-value categories now comprising 38% of the portfolio, providing essential support to overall performance despite a slight decline in base categories due to soft customer demand, indicating successful product mix adjustments.
- Positive Future Outlook: Management guided for Q1 2026 adjusted earnings per share in the range of $2.40 to $2.46, representing approximately 6% growth year-over-year, and plans to accelerate organic growth through new customer acquisition and rapid innovation, while maintaining a cautious stance on macroeconomic conditions.
- Ongoing Strategic Investments: The company aims to leverage approximately $50 million in restructuring savings to enhance productivity while continuing investments in digital capabilities and AI to improve service quality and innovation cycles, ensuring a competitive edge in a challenging market.
See More
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- Sales Performance: Although quarterly sales of $2.271 billion fell short of the $2.284 billion estimate, the Materials Group saw a 5.1% increase to $1.5 billion, indicating resilience in core operations.
- Cash Flow and Shareholder Returns: The company generated over $700 million in adjusted free cash flow in 2025 and returned approximately $860 million to shareholders, showcasing its disciplined capital allocation strategy.
- Future Outlook: Avery Dennison expects Q1 GAAP earnings between $2.27 and $2.33 per share, below the $2.46 analyst estimate, reflecting a cautious stance on the macroeconomic environment.
See More
Avery Dennison (AVY) Q4 2025 Earnings Transcript
See More
Avery Dennison to Host Q4 2025 Earnings Call
- Earnings Call Scheduled: Avery Dennison is set to host a conference call on February 4, 2026, at 11:00 AM ET to discuss its Q4 2025 earnings results, aiming to provide detailed insights into financial performance and future outlook to investors and analysts.
- Live Webcast Access: Investors can access the live webcast by visiting the company's dedicated events page, ensuring transparency and enhancing engagement with stakeholders during the earnings discussion.
- Importance of Information Disclosure: This call will provide critical financial data and strategic updates, helping market participants better understand the company's operational status and future growth trajectory amidst current economic conditions.
- Market Reaction Expectations: While specific financial figures have yet to be disclosed, investor interest in the company's performance in the current economic climate is high, and the outcomes of this call are expected to have a notable impact on stock price movements.
See More
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- Earnings Beat: Avery Dennison (AVY) reported adjusted earnings of $2.45 per share for Q4, surpassing analysts' expectations of $2.38, demonstrating the company's profitability and resilience in a dynamic environment.
- Revenue Growth Lags: Although revenue increased by 4% year-over-year to $2.27 billion, it fell short of Wall Street's forecast of $2.28 billion, reflecting weak market demand and pricing pressures.
- Significant Shareholder Returns: In Q4, Avery returned $191 million to shareholders through dividends and share repurchases, with total shareholder returns for the year reaching $861 million, highlighting the company's ongoing commitment to its investors.
- Optimistic Outlook: The company forecasts Q1 2026 earnings between $2.27 and $2.33 per share, with adjusted earnings expected to be between $2.40 and $2.46, aligning with market expectations and indicating management's confidence in future performance.
See More
