In the fourth quarter of 2025, Avery Dennison delivered revenues of $2.24 billion, up 4.6% versus the prior year period, driven by strength in high-value applications and modest recovery in base segments. Gross margin expanded to 28.7%, a 70 basis-point improvement reflecting favorable mix and productivity gains, while adjusted earnings per share rose 2.9% to $2.45. On a year-over-year basis, adjusted EBITDA margin held steady at 16.6% as operational efficiencies offset higher employee costs.

The Materials Group posted sales of $1.50 billion, a 5.1% increase, with intelligent labels up high-single digits and graphic films up low-single digits. Adjusted operating margin in the segment was 14.2%, down 60 basis points due to deflation-related price actions. The Solutions Group achieved $724 million in sales, up 1.5%, led by Vestcom growth of over 10% and Embelex up high-single digits; adjusted operating margin in the segment was 11.2%, down 20 basis points as productivity benefits were offset by targeted growth investments.

During Q4, Avery Dennison returned $191 million to shareholders through dividends and repurchases, buying back 0.7 million shares for $119 million. For the full year, cash returned totaled $861 million, with 3.2 million shares repurchased. The company generated more than $700 million in adjusted free cash flow and maintained a net debt to adjusted EBITDA ratio of 2.4x, underscoring disciplined capital allocation and a strong balance sheet.

In its supplemental materials, management forecast first-quarter reported EPS of $2.27 to $2.33, and adjusted EPS of $2.40 to $2.46 after excluding an estimated $0.13 per share of restructuring and other items. Key assumptions include continued growth in high-value categories, productivity improvements to offset inflationary pressures, and modest volume improvement in core materials and solutions. The company expects to sustain adjusted EBITDA margins near current levels while investing in innovation and strategic acquisitions.