Delivered another solid quarter in a dynamic environment

• 3Q25 Reported EPS of $2.13

  • Adjusted EPS (non-GAAP) of $2.37, up 2%

• 3Q25 Net sales of $2.2 billion, up 1.5%

  • Sales on an organic basis (non-GAAP) comparable to prior year

• 4Q25 Reported EPS guidance of $2.15 to $2.25

  • 4Q25 Adjusted EPS guidance of $2.35 to $2.45

MENTOR, Ohio, October 22, 2025 — Avery Dennison Corporation (NYSE: AVY), a leading global materials science and digital identification solutions company, today announced preliminary, unaudited results for its third quarter ended September 27, 2025. Non-GAAP financial measures referenced in this release are reconciled from GAAP in the attached financial schedules. Unless otherwise indicated, comparisons are to the same period in the prior year.

“We delivered a solid third quarter, with earnings above expectations in a continued dynamic environment, reflecting the strength and durability of our overall portfolio,” said Deon Stander, president and CEO. 

“We remain prepared for various scenarios while continuing to focus on our core strategies, including driving outsized growth in our high-value categories, leveraging cost controls and productivity, and executing on our disciplined capital allocation strategy.  We made progress advancing these strategies in the third quarter, safeguarding earnings in the near term and driving initiatives to deliver strong profitable growth over the cycle.”  

“Once again, I extend my gratitude to our agile, engaged and talented team for their unwavering commitment to excellence, dedication to overcoming the challenges at hand and relentless focus on executing on our strategic priorities.”

Third Quarter 2025 Results by Segment

Materials Group

• Reported sales increased 1.2% to $1.5 billion.

• Sales were down 1.9% on an organic basis.

  • Modest volume/mix growth was more than offset by deflation-related price reductions.

  • Both high-value categories (including Intelligent Labels) and the base were down low single digits.

  • Graphics and Reflectives were down low single digits; Performance Tapes and Medical were down mid-single digits.

• Reported operating margin of 14.3%

  • Adjusted operating margin (non-GAAP) of 15.2% was up 40 basis points.

  • Adjusted EBITDA margin (non-GAAP) of 17.5% was up 50 basis points, driven primarily by benefits from productivity.

Solutions Group

• Reported sales increased 2.0% to $700 million. 

• Sales were up 3.6% on an organic basis.

  • High-value categories (including Intelligent Labels) were up high single digits.

    • Intelligent Labels was up mid-single digits.

    • Vestcom and Embelex were both up more than 10%.

  • Overall apparel categories were up low single digits.

  • Base categories were down low single digits.

• Reported operating margin of 9.7%

  • Adjusted operating margin of 10.0% was down 130 basis points.

  • Adjusted EBITDA margin of 17.0% was down 90 basis points, as benefits from productivity and higher volume were more than offset by higher employee-related costs.

Other

Balance Sheet and Capital Deployment

Through the first three quarters of 2025, the company returned $670 million in cash to shareholders through a combination of share repurchases and dividends. The company repurchased 2.5 million shares at an aggregate cost of $454 million through the third quarter. Net of dilution from long-term incentive awards, the company’s share count was down 3.1 million compared to the same time last year.

The company continues to deploy capital in a disciplined manner, executing its long-term capital allocation strategy. The company’s balance sheet remains strong. Net debt to adjusted EBITDA (non-GAAP) was 2.2x at the end of the third quarter.

In September, the company issued €500 million of 4.00% senior notes due 2035. The company intends to use the net proceeds of the offering for general corporate purposes, including to finance acquisitions and repay existing indebtedness under the company’s commercial paper program.

On October 20th, the company completed its announced acquisition of the U.S.-based flooring adhesives business of Meridian Adhesives Group for the purchase price of $390 million.  Taylor Adhesives is a leader in the development, manufacture and commercialization of specialty adhesives and coatings for the U.S. flooring industry, with projected annual 2025 revenue of $110 million.

Income Taxes

The company’s reported effective tax rate was 29.2% for the third quarter. The adjusted tax rate (non-GAAP) for the quarter was 26.5%, slightly higher than the company’s expectations.

Cost Reduction Actions

Through the first three quarters of the year, the company realized approximately $48 million in pre-tax savings from restructuring, net of transition costs, and incurred approximately $23 million in pre-tax restructuring charges.

Guidance

In its supplemental presentation materials, “Third Quarter 2025 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its financial results. Based on the factors listed and other assumptions, the company expects fourth quarter 2025 reported earnings per share of $2.15 to $2.25.

Excluding an estimated ~$0.20 per share impact of restructuring charges and other items, the company expects fourth quarter 2025 adjusted earnings per share of $2.35 to $2.45.

For more details on the company’s results, see the summary tables accompanying this news release, as well as the supplemental presentation materials, “Third Quarter 2025 Financial Review and Analysis,” posted on the company’s website at www.investors.averydennison.com, and furnished to the SEC on Form 8-K.

Throughout this release and the supplemental presentation materials, amounts on a per share basis reflect fully diluted shares outstanding.