Avery Dennison Reports 1.5% Revenue Growth but Declining Net Income in Q3 2025

Avery Dennison Corporation reported its financial results for the third quarter of fiscal 2025, revealing a net sales increase of 1.5% to $2.22 billion compared to $2.18 billion in the same period last year. The company's net income for the quarter was $166.3 million, down from $181.7 million in the prior year, resulting in earnings per share of $2.13, a decrease from $2.26. For the first nine months of 2025, net sales reached $6.58 billion, slightly up from $6.57 billion in the same period of 2024, while net income decreased to $521.6 million from $530.9 million.

The company experienced a decline in profitability primarily due to higher employee-related costs and the impact of raw material deflation-related price reductions. Marketing, general, and administrative expenses rose to $353.9 million from $346.9 million year-over-year, reflecting growth investments. Additionally, the effective tax rate increased to 29.2% from 24.1%, contributing to the lower net income. The company also recorded $22.8 million in restructuring charges during the nine months ended September 27, 2025, related to the reduction of approximately 770 positions.

Avery Dennison's operational metrics showed a slight increase in trade accounts receivable and inventories, with total current assets rising to $3.52 billion from $3.08 billion at the end of the previous fiscal year. The company reported a total debt of $3.78 billion, up from $3.15 billion, primarily due to the issuance of €500 million in senior notes in September 2025. The company’s cash and cash equivalents increased to $536.3 million, compared to $329.1 million at the end of 2024.

Strategically, Avery Dennison completed the acquisition of W.F. Taylor Holdings, Inc. for $390 million, which is expected to enhance its product offerings in the Materials Group segment. The company has also implemented strategic sourcing adjustments and pricing surcharges to mitigate the impact of tariffs on its operations. Looking ahead, Avery Dennison anticipates a favorable impact on net sales and operating income from foreign currency translation and expects to achieve incremental savings from restructuring actions.

In summary, while Avery Dennison's revenue showed modest growth, profitability faced challenges due to increased costs and tax rates. The company is actively pursuing strategic initiatives, including acquisitions and operational adjustments, to enhance its market position and financial performance in the coming quarters.