Avery Dennison : First Quarter 2026 Financial Review and Analysis

Published: 2026-04-28 06:52:17 ET AVY

Published on 04/28/2026 at 06:52 am EDT

(preliminary, unaudited) April 28, 2026

Supplemental Presentation Materials

April 28, 2026 Preliminary & unaudited, Ǫ1 2026 financial review and analysis Classification: Avery Dennison - Secret 1

Unless otherwise indicated, comparisons are to the same period in the prior year.

This presentation contains certain non-GAAP financial measures as defined by SEC rules. We report our financial results in conformity with accounting principles generally accepted in the United States of America, or GAAP, and also communicate with investors using certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with, nor are they a substitute for or superior to, the comparable GAAP financial measures. These non-GAAP financial measures are intended to supplement the presentation of our financial results prepared in accordance with GAAP. We use these non-GAAP financial measures internally to evaluate trends in our underlying performance, as well as to facilitate comparisons with the results of competitors for quarters and year-to-date periods, as applicable. Based on feedback from investors and financial analysts, we believe that the supplemental non-GAAP financial measures we provide are also useful to their assessments of our performance and operating trends, as well as liquidity. In accordance with Regulations G and S-K, reconciliations of non-GAAP financial measures from the most directly comparable GAAP financial measures, including limitations associated with these non-GAAP financial measures, are provided in the appendix to this document and/or the financial schedules accompanying the earnings news release for the quarter (see Attachments A-4 through A-8 to news release dated April 28, 2026).

Our non-GAAP financial measures exclude the impact of certain events, activities or strategic decisions. The accounting effects of these events, activities or decisions, which are included in the GAAP financial measures, may make it more difficult to assess our underlying performance in a single period. By excluding the accounting effects, positive or negative, of certain items (e.g., restructuring charges, outcomes of certain legal matters and settlements, certain effects of strategic transactions and related costs, losses from debt extinguishments, gains or losses from curtailment or settlement of pension obligations, gains or losses on sales of certain assets, gains or losses on venture and other investments, currency adjustments due to highly inflationary economies, and other items), we believe that we are providing meaningful supplemental information that facilitates an understanding of our core operating results and liquidity measures. While some of the items we exclude from GAAP financial measures recur, they tend to be disparate in amount, frequency or timing.

We use the non-GAAP financial measures described below in this presentation.

Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, currency adjustments for transitional reporting of highly inflationary economies and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for the estimated impact of extra days in our fiscal year and the calendar shift resulting from extra days in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current-period average exchange rates to exclude the effect of foreign currency fluctuations. Our 2025 fiscal year began on December 29, 2024 and ended on December 31, 2025; fiscal years 2026 and beyond are coincident with the calendar year, beginning on January 1 and ending on December 31.

Organic sales change refers to sales change ex. currency, excluding the estimated impact of acquisitions and product line divestitures.

We believe that sales change ex. currency and organic sales change assist investors in evaluating the sales change from the ongoing activities of our businesses and enhance their ability to evaluate our results from period to period. We believe that the following measures assist investors in understanding our core operating trends and comparing our results with those of our competitors.

Adjusted operating income refers to net income adjusted for taxes; other expense (income), net; interest expense; and other non-operating expense (income), net.

Adjusted EBITDA refers to adjusted operating income before depreciation and amortization.

Adjusted operating margin refers to adjusted operating income as a percentage of net sales.

Adjusted EBITDA margin refers to adjusted EBITDA as a percentage of net sales.

Adjusted tax rate refers to the projected full-year GAAP tax rate, adjusted to exclude certain unusual or infrequent events that are expected to significantly impact that rate, such as effects of certain discrete tax planning actions, impacts related to enactments of tax law changes, and other items.

Adjusted net income refers to income before taxes, tax-effected at the adjusted tax rate, and adjusted for tax-effected restructuring charges and other items.

Adjusted net income per common share, assuming dilution (adjusted EPS) refers to adjusted net income divided by the weighted average number of common shares outstanding, assuming dilution.

Net debt to adjusted EBITDA ratio refers to total debt (including finance leases) less cash and cash equivalents, divided by adjusted EBITDA for the last twelve months. We believe that the net debt to adjusted EBITDA ratio assists investors in assessing our leverage position.

Adjusted free cash ﬂow refers to cash flow provided by (used in) operating activities, less payments for property, plant and equipment, less payments for software and other deferred charges, plus proceeds from sales of property, plant and equipment, plus (minus) net proceeds from insurance and sales (purchases) of investments. Where applicable, adjusted free cash flow is also adjusted for certain acquisition-related transaction costs, proceeds from company-owned life insurance policies and net cash used for Argentine Blue Chip Swap securities. We believe that adjusted free cash flow assists investors by showing the amount of cash we have available for debt reductions, dividends, share repurchases and acquisitions.

Adjusted free cash ﬂow conversion refers to adjusted free cash flow divided by net income.

This document has been furnished (not filed) on Form 8-K with the SEC and may be found on our website at https://www.investors.averydennison.com.

April 28, 2026 Preliminary & unaudited, Ǫ1 2026 financial review and analysis Classification: Avery Dennison - Secret 3

Strong Ǫ1 Results

Adj. EPS (non-GAAP) of $2.47, above midpoint of guidance and up 7%

Delivered organic growth of 1%, driven by strong volume

Adj. EBITDA margin (non-GAAP) of 16.4%, comparable to prior year

Strength & Durability of Franchise

Base categories organic sales up LSD with strong growth in base labels partially offset by softer apparel

High-value categories (HVC) organic sales roughly flat; Solutions up LSD offset by Materials down LSD

Continuing to deliver strong cost management and productivity

Well-positioned to manage through continued uncertain environment

Disciplined Capital Allocation

Generated strong adj. free cash flow (non-GAAP) of $104 mil.

Returned $133 mil. to shareholders through $72 mil. dividends and $61 mil. of share repurchases

Expanding leadership in Intelligent Labels through increased investment in Wiliot

Ǫ2 2026 Outlook

Expected Adj. EPS of $2.43 to $2.53

Leveraging proven playbook to mitigate inflationary pressures

Includes headwind sequentially from assumed destocking of March pre-buy

April 28, 2026 Preliminary & unaudited, Ǫ1 2026 financial review and analysis Classification: Avery Dennison - Secret 4

Note: LSD/MSD/HSD = low, mid or high single digit %

Net sales of $2.3 bil.

Sales change ex. currency (non-GAAP) up 2.3% Sales on an organic basis (non-GAAP) up 1.1%

Reported operating income of $272 mil.

Adj. EBITDA margin of 16.4%, comparable to prior year

Adj. operating margin (non-GAAP) of 12.6%, down 20 bps

Strong adj. FCF of $104 mil.

Reported EPS of $2.18

Adj. EPS of $2.47, up 7%

Returned $133 mil. to shareholders through share repurchases and dividends

Maintained strong balance sheet; continuing to deploy capital in disciplined manner

Net debt to adj. EBITDA ratio (non-GAAP) of 2.4

First Ǫuarter 2026 Results

Reported sales increased 11.4% to $1.6 bil.

Sales up 1.9% organically

MSD volume/mix growth partially offset by deflation-related price reductions

Base categories up MSD and high-value categories down LSD

Graphics and Reflectives down MSD; Performance Materials down LSD

Reported operating margin of 14.9%

Adj. operating margin of 15.4%, down 20 bps

Adj. EBITDA margin of 17.8%, up 10 bps

Productivity and net benefit of pricing and raw material costs, including raw material re-engineering, were partially offset by mix and higher employee-related costs

2025 Sales by Product

High-value Categories

Product Category

Emerging Markets

Est. End Market

2025 Sales by Geography

First Ǫuarter 2026 Results

High-value Categories

Product Category

Reported sales decreased 2.8% to $649 mil.

Sales down 0.9% organically

High-value categories up LSD

Embelex and Vestcom up MSD; Intelligent labels down LSD

Base categories down MSD

Overall apparel categories comparable to PY

Reported operating margin of 7.5%

Est. End Market

Adj. operating margin of 9.0%, down 120 bps

Adj. EBITDA margin of 16.4%, down 80 bps

Productivity and net benefit of pricing and raw material costs were more than offset by higher employee-related costs and investments

2025 Sales by Product

2025 Sales by Geography

Overall Results:

Ǫ1 sales down LSD on organic basis

Apparel and general retail up LSD on apparel program expansions

Food and logistics down LDD on soft logistics customer demand

Increased investment in Wiliot to expand intelligent labels adoption

Key End Segment Insights for 2026:

Apparel and general retail: Continued macro uncertainty still impacting business; expect growth in 2026

Food: Continue to anticipate largest U.S. grocery retailer rollout in bakery, meat and deli will be heavily weighted to 2H

Logistics: Lapping outsized growth and share in 2025; expanding pilots with additional customers in 2026

Food & Logistics

Apparel

$0.9B

2025 Sales by category

April 28, 2026 Preliminary & unaudited, Ǫ1 2026 financial review and analysis Classification: Avery Dennison - Secret 8

Note: LDD = low-double digit %

Low

High

Reported EPS

$2.21

$2.31

Est. other items & restructuring costs

~$0.22

Adjusted EPS

$2.43

$2.53

In Ǫ2 2026, anticipate adj. EPS of $2.43-$2.53

Reported sales growth of 2-4% and organic sales growth of 0-2%

~1% tailwind from currency translation at recent rates and ~1% impact from acquisition

Includes headwind from assumed destocking of March pre-buy

Additional full-year considerations

~$0.25 net EPS tailwind from benefits of currency translation and lower share count, partially offset by higher adjusted tax rate and interest expense

Incremental savings of >$55 mil. from restructuring actions (previously ~$50 mil.)

Majority of 2025 temporary savings, including incentive compensation, expected to be headwind

Targeting ~100% adj. FCF conversion; fixed and IT capital spend of ~$260 mil.

Assuming current economic conditions, anticipate sequential earnings growth through the year, with historical earnings seasonality (excluding destocking impacts)

September 18, 2024 Avery Dennison 2024 Investor Day 10

Summary Information & Reconciliation of Non-GAAP Financial Measures from GAAP

Change in FY'26 Forecast (Apr vs. Jan forecast)

Source: S&P Global Market Intelligence

Global Avg. PE price & WTI Price

Global Avg PE

Apr +33% vs Feb

WTI Price

Apr +40% vs Feb

Source: S&P Global Market Intelligence, IHS

U.S. Consumer Sentiment

2019 2020 2021 2022 2023 2024 2025 2026

Source: University of Michigan

U.S. Apparel Inventory-to-Sales Ratio

2010-2019 Avg.

2.10

Source: U.S. Census Bureau

Total Company

Materials Group

Solutions Group

Net sales change

7.0%

11.4%

(2.8)%

Reclass. of sales between segments

(1.4)%

3.1%

Foreign currency translation

(4.7)%

(6.5)%

(1.1)%

Sales change ex. currency(1)

2.3%

3.6%

(0.9)%

Acquisitions

(1.2)%

(1.6)%

Organic sales change(1)

1.1%

1.9%

(0.9)%

(1) Totals may not sum due to rounding

1Ǫ25

2Ǫ25

3Ǫ25

4Ǫ25

1Ǫ26

Net sales change

(0.1)%

(0.7)%

1.5%

3.9%

7.0%

Foreign currency translation

2.5%

(0.3)%

(1.7)%

(4.7)%

Impact of extra days

(1.5)%

Sales change ex. currency(1)

2.3%

(1.0)%

(0.2)%

0.6%

2.3%

Acquisitions

(0.8)%

(1.2)%

Organic sales change(1)

2.3%

(1.0)%

(0.2)%

1.1%

Materials Group organic sales change

1.2%

(1.0)%

(1.9)%

(0.9)%

1.9%

Solutions Group organic sales change

4.9%

(0.8)%

3.6%

1.3%

(0.9)%

(1) Totals may not sum due to rounding

Reported Operating Margin

Adjusted Operating Margin

Adjusted EBITDA Margin

1Ǫ26

1Ǫ25

Materials Group

14.9%

15.3%

Solutions Group

7.5%

8.7%

Total Company

11.8%

11.9%

1Ǫ26

1Ǫ25

15.4%

15.6%

9.0%

10.2%

12.6%

12.8%

1Ǫ26

1Ǫ25

17.8%

17.7%

16.4%

17.2%

16.4%

Latin Am.

Other Asia-Pac

U.S. &

Canada

$8.9B

China

Western Europe

Industrial/ Durable

Non-durable Goods

60%+

Staples

Apparel

Logistics

EEMENA

Est. 2025 Sales by End Market

2025 Sales by Manufacturing Location

averydennison.com

#MakingPossible

April 28, 2026 Preliminary & unaudited, Ǫ1 2026 financial review and analysis Classification: Avery Dennison - Secret 16

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Avery Dennison Corporation published this content on April 28, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2026 at 10:51 UTC.