Avery Dennison Announces Third Quarter 2023 Results

Q3 2023 Results


  • 3Q23 Net sales of $2.1 billion
    • Sales change ex. currency (non-GAAP) down 10%
    • Organic sales change (non-GAAP) down 11%
  • 3Q23 Reported EPS of $1.71
    • Adjusted EPS (non-GAAP) of $2.10, up 9% sequentially
  • 4Q23 Reported EPS guidance of $2.05 to $2.20
    • Adjusted EPS guidance of $2.10 to $2.25

MENTOR, Ohio, October 25, 2023 – Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its third quarter ended September 30, 2023. 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.


“Earnings per share were in line with our expectations for the third quarter, again increasing sequentially,” said Deon Stander, president and CEO. “Volume in both Label Materials and Apparel Solutions improved sequentially, continuing to recover from slow market conditions, largely inventory destocking, while our Intelligent Labels platform continued to accelerate adoption into new categories.


“We expect further sequential improvement in the fourth quarter, as the pace of inventory destocking continues to moderate and non-apparel intelligent label programs accelerate.

“In Intelligent Labels, we expect to deliver more than twenty percent growth annually in the coming years, as adoption accelerates in logistics, food, and general retail, and apparel rebounds, further advancing our leadership position at the intersection of the physical and digital,” added Stander.


“We remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation through a balance of profitable growth and capital discipline.


“Once again, I want to thank our entire team for their continued resilience and commitment to addressing the unique challenges at hand.”


Third Quarter 2023 Results by Segment


Materials Group

  • Reported sales decreased 14% to $1.5 billion. Sales were down 16% ex. currency and on an organic basis.
    • Label Materials sales were down high-teens on an organic basis.
      • Lower volume was driven primarily by inventory destocking.
      • Volume was up sequentially as the impact of inventory destocking continues to moderate.
    • Sales decreased by low-single digits organically in the Graphics and Reflective Solutions businesses.
    • Sales increased by low-single digits organically in the combined Performance Tapes and Medical businesses.
  • Reported operating margin was 12.1%. Adjusted EBITDA margin (non-GAAP) was strong, increasing 70 basis points sequentially to 16.4%. Adjusted EBITDA margin increased 90 basis points compared to prior year, as productivity and temporary cost-saving actions more than offset lower volume and mix.

Solutions Group

  • Reported sales increased 3% to $642 million. Sales were up 5% ex. currency and 1% on an organic basis.
    • Apparel Solutions volume was up sequentially; retailer and brand sentiment remains muted.
    • Sales in high-value categories were up high-single digits on an organic basis.
    • Sales were down mid-to-high single digits organically in base solutions.
  • Reported operating margin was 7.9%. Adjusted EBITDA margin was 16.4%, up 60 basis points sequentially and is expected to further improve in Q4. Adjusted EBITDA margin decreased 250 basis points compared to prior year, driven by volume, higher employee costs and growth investments, partially offset by productivity and temporary cost-saving actions.
  • The company announced an agreement to acquire Silver Crystal Group, expanding our external embellishments portfolio, with annual sales of approximately $30 million.



Balance Sheet and Capital Deployment

During the first three quarters of the year, the company deployed $204 million for acquisitions and returned $309 million in cash to shareholders through a combination of dividends and share repurchases. The company repurchased 0.7 million shares at an aggregate cost of $117 million during the first three quarters of the year. Net of dilution from long-term incentive awards, the company’s share count at the end of the quarter was down 0.7 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 2.6x at the end of the third quarter.


Income Taxes

The company’s reported third quarter effective tax rate was 25.1%. The adjusted tax rate (non-GAAP) for the quarter was 26.3%.


The company’s 2023 adjusted tax rate is expected to be in the mid-twenty percent range based on current tax regulations.


Cost Reduction Actions

During the first three quarters of the year, the company realized approximately $45 million in pre-tax savings from restructuring, net of transition costs, and incurred approximately $71 million in pre-tax restructuring charges.




In its supplemental presentation materials, “Third Quarter 2023 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its fourth quarter 2023 financial results. Based on the factors listed and other assumptions, the company expects fourth quarter 2023 reported earnings per share of $2.05 to $2.20.

Excluding an estimated $0.05 per share impact of restructuring charges and other items, the company expects fourth quarter 2023 adjusted earnings per share of $2.10 to $2.25.


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 2023 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.



About Avery Dennison

Avery Dennison Corporation (NYSE: AVY) is a global materials science and digital identification solutions company that provides a wide range of branding and information solutions that optimize labor and supply chain efficiency, reduce waste, advance sustainability, circularity and transparency, and better connect brands and consumers. Our products and solutions include labeling and functional materials, radio frequency identification (RFID) inlays and tags, software applications that connect the physical and digital, and a variety of products and solutions that enhance branded packaging and carry or display information that improves the customer experience. Serving an array of industries worldwide — including home and personal care, apparel, general retail, e-commerce, logistics, food and grocery, pharmaceuticals and automotive — we employ approximately 34,000 employees in more than 50 countries. Our reported sales in 2023 were $8.4 billion. Learn more at www.averydennison.com.


“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

Certain statements contained in this document are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements, and financial or other business targets, are subject to certain risks and uncertainties.


We believe that the most significant risk factors that could affect our financial performance in the near term include: (i) the impacts to underlying demand for our products from global economic conditions, political uncertainty, and changes in environmental standards and governmental regulations; (ii) the cost and availability of raw materials; (iii) competitors' actions, including pricing, expansion in key markets, and product offerings; (iv) the degree to which higher costs can be offset with productivity measures and/or passed on to customers through price increases, without a significant loss of volume; (v) foreign currency fluctuations; and (vi) the execution and integration of acquisitions.


Actual results and trends may differ materially from historical or anticipated results depending on a variety of factors, including but not limited to, risks and uncertainties related to the following:

  • International Operations – worldwide and local economic and market conditions; changes in political conditions, including those related to China, the Russian invasion of Ukraine and the Israel-Hamas war; and fluctuations in foreign currency exchange rates and other risks associated with foreign operations, including in emerging markets
  • Our Business – fluctuations in demand affecting sales to customers; fluctuations in the cost and availability of raw materials and energy; changes in our markets due to competitive conditions, technological developments, environmental standards, laws and regulations, and customer preferences; the impact of competitive products and pricing; execution and integration of acquisitions; selling prices; customer and supplier concentrations or consolidations; financial condition of distributors; outsourced manufacturers; product and service quality; timely development and market acceptance of new products, including sustainable or sustainably-sourced products; investment in development activities and new production facilities; successful implementation of new manufacturing technologies and installation of manufacturing equipment; our ability to generate sustained productivity improvement; our ability to achieve and sustain targeted cost reductions; collection of receivables from customers; and our environmental, social and governance practices
  • Income Taxes – fluctuations in tax rates; changes in tax laws and regulations, and uncertainties associated with interpretations of such laws and regulations; retention of tax incentives; outcome of tax audits; and the realization of deferred tax assets
  • Information Technology – disruptions in information technology systems or data security breaches, including cyber-attacks or other intrusions to network security; and successful installation of new or upgraded information technology systems
  • Human Capital – recruitment and retention of employees and collective labor arrangements
  • Our Indebtedness – credit risks; our ability to obtain adequate financing arrangements and maintain access to capital; fluctuations in interest rates; volatility of financial markets; and compliance with our debt covenants
  • Ownership of Our Stock – potential significant variability of our stock price and amounts of future dividends and share repurchases
  • Legal and Regulatory Matters – protection and infringement of intellectual property; impact of legal and regulatory proceedings, including with respect to environmental, anti-corruption, health and safety, and trade compliance
  • Other Financial Matters – fluctuations in pension costs and goodwill impairment

For a more detailed discussion of these factors, see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Form 10-K, filed with the Securities and Exchange Commission on February 22, 2023, and subsequent quarterly reports on Form 10-Q.


The forward-looking statements included in this document are made only as of the date of this document, and we undertake no obligation to update these statements to reflect subsequent events or circumstances, other than as may be required by law.


For more information and to listen to a live broadcast or an audio replay of the quarterly conference call with analysts, visit the Avery Dennison website at www.investors.averydennison.com.

Media Contacts


Kristin Robinson

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John Eble

Vice President, Finance and Investor Relations