Avery Dennison 2025 Q2 Earnings Modest Growth as Net Income Rises 6.9%

Avery Dennison (AVY) reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. Avery Dennison exceeded expectations in its second quarter of 2025, with net income rising by 6.9% year-over-year to $189 million. The company’s earnings per share (EPS) showed a notable improvement, increasing from $2.19 in the previous year to $2.42. Looking ahead, the company anticipates third-quarter reported EPS to be between $2.14 and $2.30, with adjusted EPS estimated between $2.24 and $2.40, excluding restructuring charges. This guidance aligns with market expectations, demonstrating the company's resilience amid various macroeconomic challenges.

Revenue
Avery Dennison's revenue for the second quarter of 2025 was $2.22 billion, reflecting a slight decline of 0.7% from the previous year. The Materials Group contributed $1.55 billion, maintaining its position as a key revenue driver, while the Solutions Group generated $670.30 million. Despite trade policy changes affecting sourcing demand, the company leveraged growth in high-value categories to mitigate the impact.

Earnings/Net Income
Avery Dennison's EPS rose by 10.5% to $2.42 in 2025 Q2, up from $2.19 in 2024 Q2, indicating positive earnings growth. Net income also increased by 6.9% to $189 million, showcasing robust profitability. The EPS performance reflects a strong financial standing in the current fiscal environment.

Price Action
The stock price of Avery Dennison has edged down 1.22% during the latest trading day, has dropped 5.17% during the most recent full trading week, and has edged down 2.09% month-to-date.

Post-Earnings Price Action Review
A strategy of purchasing Avery Dennison (AVY) stock following an earnings beat and holding for 30 days yielded moderate returns but underperformed the benchmark. The strategy resulted in a 47.09% return, while the benchmark delivered an 87.35% return. The Sharpe ratio was 0.32, reflecting a reasonable risk-adjusted return. Notably, the maximum drawdown was 0%, indicating a lack of volatility within this strategy. Although the returns were positive, they fell short of the benchmark, highlighting the challenges faced by investors seeking higher gains in the current market landscape.

CEO Commentary
Deon Stander, President and CEO, expressed satisfaction with the company's performance in a challenging environment, highlighting that earnings exceeded expectations due to the strength of Avery Dennison's portfolio. He noted that while trade policy changes impacted sourcing demand in apparel and retail, growth in high-value categories and productivity enhancements mitigated this effect. Stander emphasized the uncertainty surrounding the broader implications of these trade changes but reassured stakeholders of the company's preparedness for various scenarios, leveraging a proven strategy to safeguard earnings and drive profitable growth.

Guidance
Avery Dennison anticipates third-quarter 2025 reported earnings per share in the range of $2.14 to $2.30, with adjusted EPS estimated between $2.24 and $2.40, excluding an approximate $0.10 per share impact from restructuring charges. The company aims for continued growth despite external challenges, underpinned by strategic investments and operational efficiency.

Additional News
Avery Dennison's Board of Directors declared a quarterly cash dividend of $0.94 per share, payable on September 17, 2025, to shareholders of record as of September 3, 2025. The company also returned $503 million to shareholders in the first half of 2025 through share repurchases and dividends, repurchasing 2.0 million shares at a cost of $360 million. In leadership news, David Flitman was appointed to the Avery Dennison Board of Directors, reinforcing the company's commitment to experienced governance. These strategic moves demonstrate Avery Dennison's focus on shareholder value and long-term growth.