Avery Dennison outlines 6% Q1 2026 EPS growth target as high-value category mix accelerates

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• Does not anticipate an increase in customer acquisition costs and feels confident in the company's paper supply risk management

  80% confidence

• Base volumes were a bit soft in the quarter, and productivity actions were used to offset wage inflation, with some onetime items and extra calendar days impacting results

  80% confidence

• High-value categories in Solutions Group provided necessary offset to base solutions which continue to be impacted by tariff-related uncertainty

  80% confidence

• The Walmart announcement increased pipeline interest in Intelligent Labels

  80% confidence

• The Walmart announcement increased pipeline interest, indicating positive market reception

  80% confidence

• Ongoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation, strengthen service and quality, shorten innovation cycles and provide more data-driven solutions

  80% confidence

• The company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025

  80% confidence

• Higher working capital was due to high-value category mix, and CapEx will support both productivity and future capacity

  80% confidence

• Vestcom grew over 10% in Q4

  80% confidence

• Ongoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation, strengthen service and quality, shorten innovation cycles and provide more data-driven solutions

  80% confidence

• The temporary savings headwind is on an order of magnitude basis probably pretty similar to the size of the restructuring actions, that $50 million

  80% confidence

• Expect restructuring savings of approximately $50 million as the company continues to execute productivity playbook, and expect normalization of majority of 2025 temporary savings related to lower incentive compensation costs

  80% confidence

• Apparel business saw a 7% decline, greater than anticipated, primarily due to changes in retailer ordering behavior amid tariff uncertainty

  80% confidence

• Compliance enforcement in general retail expected to provide a tailwind

  80% confidence

• Expects compliance enforcement in general retail to provide a tailwind and mentioned expanded logistics pilots with new customers

  80% confidence

• Pricing typically follows raw material input cost changes, with productivity actions aimed at offsetting wage inflation

  80% confidence

• Compliance enforcement in general retail is expected to provide a tailwind, and the company is expanding logistics pilots with new customers

  80% confidence

• Base volumes were a bit soft in the quarter

  80% confidence

• Growth acceleration will be driven by new customer acquisition, faster innovation cycles, and leveraging digital and AI investments

  80% confidence

• Does not anticipate an increase in customer acquisition costs

  80% confidence

• Does not anticipate an increase in customer acquisition costs and feels confident in the company's paper supply risk management

  80% confidence

• Restructuring benefits are expected to be somewhat balanced across the year

  80% confidence

• Ongoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation, strengthen service and quality, shorten innovation cycles and provide more data-driven solutions

  80% confidence

• Pricing typically follows raw material input cost changes, with productivity actions aimed at offsetting wage inflation

  80% confidence

• In Q4, the company delivered solid adjusted earnings per share of $2.45, up 3% compared to prior year

  80% confidence

• High-value categories in Solutions Group provided a necessary offset to base solutions, which continue to be impacted by tariff-related uncertainty

  80% confidence

• Anticipating Intelligent Labels growth rate in 2026 to be above what was delivered in 2025, with high-value categories expected to grow at mid-single-digit plus

  80% confidence

• Restructuring savings of approximately $50 million expected as company continues to execute productivity playbook

  80% confidence

• The company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025, demonstrating the durability of the franchise and ability to activate multiple levers across a range of macro scenarios

  80% confidence

• Given key economic indicators remain largely consistent with 2025 levels, the company is not planning for any macroeconomic tailwinds in the near term

  80% confidence