Avery Dennison Reports Slight Decline in Net Sales and Income for Q1 2025

Avery Dennison Corporation reported a slight decline in net sales for the first quarter of 2025, totaling $2.148 billion, compared to $2.151 billion in the same period last year. The company's net income also decreased to $166.3 million, down from $172.4 million in the prior year. This resulted in earnings per share of $2.10, a decrease from $2.14 in the first quarter of 2024. The decline in profitability was attributed to raw material deflation-related price reductions, losses on venture investments, and unfavorable foreign currency translation, which were partially offset by productivity initiatives and higher volume/mix.

In terms of operational performance, Avery Dennison's Materials Group reported net sales of $1.480 billion, down from $1.496 billion, while the Solutions Group saw an increase in sales to $668.2 million from $654.8 million. The company noted that organic sales increased by 2% overall, driven by higher volume and mix, although this was tempered by price reductions related to raw materials. The company also reported a restructuring charge of $4.8 million, primarily related to severance costs for approximately 130 positions, aimed at optimizing its operational footprint.

Avery Dennison's total assets decreased slightly to $8.355 billion from $8.404 billion at the end of the previous fiscal year. The company’s cash and cash equivalents also fell to $195.9 million from $329.1 million, while trade accounts receivable increased to $1.518 billion from $1.466 billion. The company’s total liabilities rose to $6.184 billion, up from $6.172 billion, largely due to an increase in short-term borrowings and the current portion of long-term debt.

Looking ahead, Avery Dennison anticipates continued challenges from global economic conditions, including the impact of tariffs and geopolitical uncertainties. The company expects that these factors may lead to a low single-digit inflation rate on total raw material purchases. Despite these challenges, Avery Dennison is implementing strategic sourcing adjustments and pricing surcharges to mitigate potential impacts. The company projects that its effective tax rate will remain in the mid-twenty percent range for the full year, and it aims to achieve incremental savings from restructuring actions.

In April 2025, the Board of Directors authorized an additional $750 million for share repurchases, reflecting the company's commitment to returning value to shareholders. The company continues to focus on enhancing its operational efficiency and adapting to market conditions while navigating the complexities of international trade and economic fluctuations.