Avery Dennison delivered adjusted Q4 earnings per share of $2.45, surpassing the consensus estimate of $2.40 and marking a 2.9% year-over-year increase from $2.38 in Q4 2024. Total revenue rose 3.5% to $2.2 billion versus the prior year, driven by expanded gross margin that reached 28.7%, up 120 basis points sequentially. Adjusted EBITDA margin improved to 17.2%, reflecting disciplined pricing actions and productivity gains despite headwinds from tariff impacts and currency fluctuations.

In the Materials Group, sales climbed 5.1% to $1.50 billion, with high-value categories up low single digits and Intelligent Labels up high single digits. Adjusted operating margin was 14.2%, down 60 basis points due to higher employee costs. The Solutions Group reported $724 million in sales, up 1.5%, led by high-value category growth of high single digits; adjusted operating margin held at 11.2%. Together, both segments sustained robust free cash flow generation and drove the company’s full-year adjusted EBITDA margin to 16.4%.

Avery Dennison generated more than $700 million in adjusted free cash flow over 2025, funding $861 million of total shareholder returns. During Q4, the company returned $191 million through dividends and share repurchases of 0.7 million shares for $119 million. Net debt to adjusted EBITDA remained conservative at 2.4x at year-end, underlining the company’s capacity for strategic investments alongside continued share repurchases and dividend growth.

For Q1 2026, management projects reported EPS of $2.27 to $2.33 and adjusted EPS of $2.40 to $2.46, excluding an estimated $0.13 per share of restructuring and other items. The company plans to further grow high-value category revenue, advance innovation in digital identification solutions, and pursue disciplined capital deployment. Key priorities include maintaining productivity improvements, offsetting cost inflation, and expanding market share in Intelligent Labels and RFID offerings.