AVY

Interested in Avery Dennison Corporation? Here are five stocks we like better. Strong second-quarter performance: Avery Dennison reported 8% organic sales growth, 19% adjusted EPS growth to $2.89, a 50-basis-point adjusted EBITDA margin expansion to 17.1%, and $365 million in adjusted free cash flow. Inventory pre-buying boosted results but may reverse: Customer inventory building contributed about half of quarterly organic growth and approximately $0.25 of EPS, while the company expects Materials Group destocking to create an estimated $0.50 sequential earnings headwind in the third quarter. Full-year outlook restored: Avery Dennison reinstated 2026 guidance for adjusted EPS of $10.00–$10.30 and organic sales growth of 3%–4%, supported by productivity initiatives, expanding Solutions margins, and continued Intelligent Labels growth in apparel, retail, and food markets. Is Zoom Video Stock Getting Too Cheap to Pass Up? Avery Dennison (NYSE:AVY) reported second-quarter results marked by accelerating organic growth, higher margins and strong free cash flow, while reinstating full-year guidance despite expected customer inventory destocking in its Materials Group during the second half. Chief Executive Officer Deon Stander said organic sales rose 8% year over year, adjusted earnings per share increased 19%, and adjusted free cash flow exceeded $360 million. The company reported adjusted EPS of $2.89, while adjusted EBITDA margin expanded 50 basis points to 17.1%. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now 3 high-quality dividend growers to buy on the dip “Our performance this quarter once again demonstrated the strength and the resilience of our portfolio,” Stander said, citing balanced growth between base and high-value categories, commercial execution and operational productivity. The company said customer inventory pre-buying, particularly in Label Materials, contributed materially to second-quarter growth as customers responded to rising raw-material costs and supply concerns in Europe and parts of Asia. → Microsoft Just Flipped the AI Spending Narrative Overnight International Paper's 5% Yield Offers Big Value Chief Financial Officer Greg Lovins said approximately half of the company’s 8% organic growth in the quarter was related to inventory building. The activity added an estimated $0.25 to second-quarter earnings per share. For the first half, Avery Dennison estimated customer stocking added roughly five points of growth, or about 2.5 percentage points of growth for the six-month period. Materials Group organic sales increased 10%, driven by high-single-digit volume-mix growth and low-double-digit pricing realization. Excluding the estimated benefit from customer pre-buys, underlying organic growth in the segment remained in the mid-single digits, Lovins said. → Carrier Earnings Could Send the Stock to a New All-Time High High-value Materials categories grew in the mid-single digits, led by low-double-digit growth in specialty and durable labels and high-single-digit growth in Intelligent Labels. Industrial tapes posted low-single-digit growth, while graphics and reflective products were comparable with the prior year. Materials Group adjusted EBITDA increased 17%, with margin expanding 20 basis points. The company cited volume, productivity, pricing and raw-material cost management as drivers, partly offset by an unfavorable product mix and higher employee-related costs. Avery Dennison experienced mid-single-digit year-over-year raw-material inflation in the second quarter, including high-single-digit sequential inflation. The company expects high-single-digit year-over-year raw-material inflation in the second half, though Lovins described the environment as uncertain. Solutions Group organic sales rose 3%, with both high-value categories and base solutions posting low-double-digit growth. Embelex, the company’s embellishments business, recorded low-double-digit growth, supported by core market expansion and World Cup demand. Intelligent Labels in Solutions grew in the low single digits, while Vestcom declined slightly as the company lapped a major customer rollout in 2025. Base solutions returned to low-single-digit sales growth, according to Stander. Solutions Group adjusted EBITDA margin reached 18.6%, up 150 basis points from a year earlier and 220 basis points sequentially. Lovins said the improvement reflected productivity initiatives, reversal of prior-year tariff-related network inefficiencies and a favorable net price-cost impact. He said the company expects some margin moderation in the third quarter but still anticipates second-half margins above prior-year levels. Enterprise-wide Intelligent Labels sales increased in the low single digits during the second quarter. Apparel and general retail sales rose about 10%, driven by program expansions in apparel and a recovery in general retail. Logistics sales, however, declined by double digits as the company faced difficult comparisons with outsized share gains in 2025 and softer customer demand. Stander said the company continues to expect Intelligent Labels growth for 2026 to exceed its 2025 growth rate. He expects apparel and general retail to produce strong full-year growth and said food-related activity should accelerate in the second half as the company begins a rollout with its largest U.S. grocery retailer and expands programs with other customers. In food, Stander said initial deployments have focused on bakery, while the company is advancing protein pilots. He said larger commercial deployments can have varying timelines, but the company expects a rollout with Walmart to begin in the second half of 2026. Other customer pilots are expected to contribute more meaningfully in 2027 and beyond. Stander also described artificial intelligence as a potential accelerator for Intelligent Labels, saying AI can help customers extract more value from item-level data generated across supply chains, retail operations and consumer use. Avery Dennison reinstated full-year 2026 guidance, forecasting adjusted EPS of $10 to $10.30 and organic sales growth of 3% to 4%. Reported sales are expected to grow 5% to 6%, including an estimated 1.5 percentage-point benefit from currency translation and a 1-percentage-point contribution from the Taylor Adhesives acquisition, partly offset by a nearly half-point fiscal-calendar headwind. The company expects the majority of Materials Group inventory destocking to occur in the third quarter, with a smaller carryover into the fourth quarter. Lovins said the company’s outlook assumes approximately a $0.25 headwind in the third quarter after the $0.25 benefit from inventory building in the second quarter, producing an estimated $0.50 sequential earnings headwind from the reversal. For the full year, Avery Dennison expects customer inventory management to have a largely neutral effect on earnings. Its earnings outlook also incorporates productivity and restructuring benefits of more than $60 million, offset by wage inflation and the normalization of temporary 2025 savings, primarily related to incentive compensation. The company generated $365 million in adjusted free cash flow during the quarter and ended the period with net debt to adjusted EBITDA of 2.3 times. Avery Dennison returned more than $210 million to shareholders during the quarter through $76 million in dividends and $138 million in share repurchases, bringing year-to-date shareholder returns to roughly $350 million. Avery Dennison (NYSE:AVY) is a global materials science and manufacturing company specializing in labeling and packaging solutions. The company develops pressure-sensitive materials, tags and labels, and adhesive technologies that help brands and businesses enhance product identification, branding and supply-chain performance. Avery Dennison's offerings range from industrial and retail labeling to high-performance tapes, films and graphics materials used across multiple end markets. The company operates through several key segments, including Label and Graphic Materials, which supplies pressure-sensitive materials for consumer goods; Retail Branding and Information Solutions, offering apparel tags, RFID inlays and digital product identification; Pressure-Sensitive Materials, providing specialty tapes and adhesives; and RF Technologies, focused on advanced RFID and IoT labeling solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Avery Dennison Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Image source: The Motley Fool. Thursday, July 30, 2026 at 11:00 a.m. ET Vice President of Investor Relations - William R. Gilchrist President and Chief Executive Officer - Deon Stander Senior Vice President and Chief Financial Officer - Gregory S. Lovins Operator: Ladies and gentlemen, welcome to Avery Dennison's Earnings Conference Call for the Second Quarter Ended on June 30, 2026. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a Q&A session. At that time, if you would like to ask a question, please raise your hand and enter the queue. As a reminder, this webcast is being recorded and will be available for replay on the Avery Dennison Investor Relations website. I would now like to turn the call over to William R. Gilchrist, Avery Dennison's vice president of investor relations. Please go ahead, sir. William R. Gilchrist: Thank you, Ellen, and welcome to Avery Dennison's second quarter 2026 earnings Conference Call. Please note that throughout today's discussion, we will be making references to non-GAAP financial measures. The non-GAAP measures that we use are defined, qualified, and reconciled from GAAP on schedules A-4 to A-8 of the financial statements accompanying today's earnings release. Remind you that we will make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These forward-looking statements are made subject to the Safe Harbor statement included in today's earnings release. On the call today are Deon, President and Chief Executive Officer and Greg, senior vice president and chief financial officer. I will now turn the call over to Deon. Deon Stander: Thanks, Bill, and good morning, everyone. We delivered strong second quarter results across the board. On a year-over-year basis, organic sales growth accelerated to 8%, adjusted EBITDA margins expanded, adjusted EPS grew by 19%, and adjusted free cash flow generation was strong at more than $360 million. While these results benefited from continued customer inventory stocking in Materials Group. Excluding this tailwind, we continue to drive a step change in the pace of our sales and earnings growth. Our performance this quarter once again demonstrated the strength and resilience of our portfolio. Sales growth was balanced across both base and high-value categories, with high-value categories returning to mid-single-digit growth as we expected. Combining this improved organic growth with our commercial and operational excellence allowed us to expand adjusted EBITDA margins across both segments, even against a volatile and inflationary cost backdrop. Our priorities are clear. We are continuing to drive both earnings growth and business resiliency by leaning into our proven playbook. First, we are investing in innovation- and service-led differentiation to drive share gains and expand new business opportunities. The strength of this focus was evident in our second quarter performance where organic sales growth accelerated. Second, we are executing commercial and operational agility including productivity and pricing actions to mitigate inflationary pressures. And third, we are generating strong free cash flow and maintaining a healthy balance sheet. Our balance sheet strength, and robust cash generation supported the increased pace of our share repurchases during the quarter and another increase in our dividend while continuing to invest in our long-term growth priorities. Turning to our segment results. Materials Group delivered organic sales growth of approximately 10%, driven by high-single-digit volume/mix growth as well as low-single-digit pricing realization as we began to pass on cost inflation. During the quarter, the business delivered solid performance across both base and high-value categories. Encouragingly, high-value categories grew mid-single-digits year-over-year, led by specialty and durable labels, as well as Intelligent Labels. Base categories grew low-double-digits driven by underlying market growth, continued share gains and the benefit of customer pre-buys. In Label Materials, customer pre-buying persisted longer into the quarter than we initially anticipated. Driven by accelerating raw material inflation as well as customer concerns regarding surety of supply, particularly in Europe and parts of Asia. Looking forward, while it is difficult to predict the timing of when the unwind will happen, due to continued geopolitical uncertainty, we anticipate the majority of the unwind in the third quarter with a smaller carryover into Q4. From a profitability perspective, Materials Group adjusted EBITDA was strong, growing in the high teens with margins expanding compared to prior year. In Solutions Group, organic sales grew 3%. The quarter was characterized by solid low-single-digit growth across both our high-value categories and base solutions. Within our high-value platforms, Embelex delivered robust low-double-digit growth driven by core market expansion and strong World Cup demand. Intelligent Labels grew low-single-digits while Vestcom was down slightly as we lapped a major customer rollout from 2025. In our base solutions, we were pleased to see sales return to low-single-digit growth. From a profitability perspective, execution on our productivity playbook more than offset higher employee-related costs. This allowed us to deliver strong EBITDA margin expansion. Pivoting to our enterprise-wide Intelligent Labels platform, sales were up low-single-digits compared to prior year, in line with our growth expectations for the quarter. As anticipated, this headline number reflects varying dynamics across our major end markets. In our largest category, apparel and general retail, we delivered another quarter of strong performance with sales up approximately 10%. This growth was driven by continued program expansion in apparel, alongside a solid recovery in general retail. Conversely, we experienced a headwind in logistics where sales were down double digits. This was driven by the difficult comparison of lapping outsized share gains from 2025 and softer overall customer demand in that segment. Looking ahead, we continue to expect 2026 growth for our enterprise Intelligent Labels platform to outpace 2025. In apparel and general retail, we expect to deliver strong full-year growth as adoption continues to deepen. In food, we are positioning the platform for an acceleration in the back half of the year driven by the beginning of the rollout with the largest U.S. grocery retailer and expanding activity across other customers. Finally, in logistics, we are managing through the normalization of outsized volume share gains from 2025 with the largest partner, while continuing to expand pilots with new logistics customers. As to our outlook, we are returning to providing full year guidance reflecting our team's strong execution through a dynamic environment and the challenges of precisely timing the second-half customer inventory destocking in Materials Group. For the full year 2026, we anticipate $10.00 to $10.30 in adjusted earnings per share on organic sales growth of 3% to 4%. In summary, our strong second quarter performance—delivering another quarter of accelerating sales and earnings growth—highlights the differentiation and underlying strength of our enterprise. We remain focused on the key secular tailwinds shaping our long-term strategy while continuing to execute the operational actions required to navigate cyclical dynamics and inflationary shifts with agility. The proactive steps we are taking to accelerate innovation-led differentiation, serve our customers, and ensure supply chain resilience further strengthen our competitive moat. Our proven strategies, market-leading resilient businesses, agile teams, and disciplined capital allocation approach give us confidence in our ability to deliver sustainable growth in 2026 and beyond. I am proud of the global Avery Dennison team. Their agility and operational execution continue to drive strong results, giving us momentum as we execute across the balance of 2026 and beyond. Now over to you, Greg. Gregory S. Lovins: Thanks, Deon, and hello, everybody. In the second quarter, we delivered strong adjusted earnings per share of $2.89, up 19% compared to prior year. Earnings growth was driven by higher volume and productivity, partially offset by higher employee-related costs and targeted growth investments. As Deon mentioned, customer inventory pre-buys were a contributing factor during the quarter, adding an estimated $0.25 to earnings. Second quarter reported sales were up 11% year-over-year, with organic sales growth of 8%, driven by strong volume/mix, and slightly favorable pricing. We estimate that roughly half of the organic growth was from customer pre-buy activity. Reported sales also benefited from approximately two points of growth from foreign currency translation and a point of growth from the Taylor Adhesives acquisition. Adjusted EBITDA margin was 17.1% in the quarter, up 50 basis points compared to prior year. And we generated strong adjusted free cash flow of $365 million in the quarter, primarily driven by earnings growth and working capital improvements. Our balance sheet remains strong, with a quarter-end net debt to adjusted EBITDA ratio of 2.3 times. Capital allocation during the second quarter remained consistent with our established framework. We returned over $210 million to shareholders through a balanced combination of $76 million in dividends and $138 million in share repurchases, an accelerated pace relative to the first quarter. This brings our year-to-date capital return to shareholders to roughly $350 million. These actions underscore our ongoing commitment to disciplined capital deployment while preserving our financial flexibility. Turning to segment results for the quarter. Materials Group organic sales were very strong, coming in 10% higher than the prior year, driven by high-single-digit volume/mix growth. Excluding our estimate of the year-over-year benefit from customer pre-buys, underlying organic sales growth remained strong at mid-single-digits. Turning to label materials. Similar to the first quarter, we believe we successfully gained share and realized favorable year-over-year pricing as we acted to mitigate the impact of rising raw material costs. From a regional perspective, compared to prior year, volume/mix in North America was up mid-single-digits, Europe delivered strong mid-teens growth, And in emerging markets, both Asia and Latin America, grew high-single-digits. Organic growth across our materials group high-value categories grew mid-single-digits, led by low-double-digit growth in specialty and durable labels, and high-single-digit growth in Intelligent Labels. Industrial tapes grew low-single-digits; Graphics and reflective sales were comparable to prior year. Materials Group adjusted EBITDA was up 17% compared to prior year, with margins up 20 basis points. This margin expansion reflects strong volume, ongoing productivity actions, and the net benefits from pricing and raw material cost inclusive of cost-out reengineering. These factors more than offset an unfavorable product mix and higher employee-related costs. Regarding raw material costs, we experienced mid-single-digit year-over-year raw material inflation in the second quarter, representing high-single-digit sequential inflation, slightly above our expectation. Our teams continue to execute our proven playbook to navigate the current inflation environment through strategic sourcing actions, reengineering, and the timely implementation of pricing actions. Looking ahead for the remainder of the year, while the situation remains uncertain, we are currently anticipating high-single-digit year-over-year inflation in the second half. Shifting to Solutions Group. Organic sales were up 3% with both high-value and base categories, delivering low-single-digit growth. Within high-value categories, Embelex delivered strong low-double-digit growth; Intelligent Labels grew low-single-digits, with particular strength in apparel, general retail categories, while Vestcom was down low-single-digits as we lapped new program rollouts from the prior year. Solutions Group adjusted EBITDA margin was 18.6%, expanding 150 basis points year-over-year and 220 basis points sequentially. This margin expansion was driven by continued execution of our productivity initiatives, the reversal of prior year tariff-related network inefficiencies, and a positive net price/cost impact inclusive of tariff-related costs. Together, these benefits more than offset higher employee-related costs and our targeted investments in growth. Turning now to our full year 2026 outlook, we anticipate reported sales growth of 5% to 6%. This includes organic growth of 3% to 4%, with approximately 1.5% from currency translation, 1% from the Taylor Adhesives acquisition, and a nearly half point headwind from the fiscal calendar change. We expect full-year adjusted earnings per share in the range of $10.00 to $10.30, representing 7% growth year-over-year at the midpoint. This full-year earnings growth is driven by benefits of organic growth, which is primarily volume/mix driven, a largely neutral impact from customer inventory management for the full year, productivity actions, including restructuring benefits of more than $60 million, offsetting headwinds from wage inflation, and the normalization of 2025 temporary savings which are largely incentive compensation-related. And a net benefit of approximately $0.30 from combined currency, share count, interest, and tax. Additionally, we remain committed to strong free cash flow, targeting roughly 100% conversion for the year, with fixed and IT capital spending of approximately $260 million. From a quarterly earnings cadence perspective, we are assuming the third quarter will see a larger than normal sequential earnings decline driven by our customer destocking timing assumption, which will represent an approximate $0.50 sequential headwind versus the benefit we saw in the second quarter. While we expect a sequential headwind in the second half as these customer pre-buys unwind, underlying earnings momentum remains strong across the balance of the year. In summary, we delivered a strong second quarter achieving 8% organic sales growth and 19% adjusted EPS growth. We generated very strong free cash flow, increased our dividend, and accelerated share repurchases while maintaining a strong balance sheet, with leverage coming down to 2.3 times. Our updated 2026 outlook anticipates 3% to 4% organic sales growth and roughly 7% EPS growth, demonstrating positive momentum toward our long-term targets. Overall, our resilient portfolio, agile execution, and disciplined capital allocation give us high confidence in our ability to deliver strong, long-term value to all stakeholders. With that, we will now open up the call for your questions. Operator: Ladies and gentlemen, we will now begin the question-and-answer session. To ask a question, please press 1 on your telephone keypad. If your question has been answered, and you would like to withdraw your registration, please press 1 again. To accommodate all participants, we ask that you please limit yourself to one question and then return to the queue if you have additional questions. Please stand by as we compile the Q&A roster. Your first question comes from the line of Ghansham Panjabi with Baird. Your line is open. Please proceed with your question. Ghansham Panjabi: Thank you, operator. Good morning, everybody. Can you just give us a bit more granularity as it relates to the growth outlook for Intelligent Labels for 2026, relative to the low-single-digits you generated in Q2? And in particular, how's your view on the major end market verticals such as apparel, general retail, food, and logistics changed, if at all, relative to the last time you reported three months ago? Thank you. Deon Stander: Thanks, Ghansham. Yes, our anticipation has always been we would continue to see our growth ramp in the second half of the year. And then when I look at the individual segments, in apparel and general retail, we continue to expect solid growth as we go through the second half of the year, largely on the new program rollouts we are doing. As well as the continued strengthening in some of the general retail execution as well. In logistics, specifically, you know, we are expecting this continued share and volume challenge relative to 2025 when we grew outside share. And volume in that period. And we expect that to persist for the remainder of the year, while we continue to also expand pilots with our existing customers that we have and some new customers in logistics pipeline. And in food, we are expecting a much more meaningful contribution from the food programs as we go through the second half of the year largely on the significant retailer rollout that we talked about for a while, as well as a lot more activity in new customer programs overall that we are seeing in the food sector, Ghansham. Panjabi. Operator: Your next question comes from the line of George Staphos with Bank of America. Please proceed with your question. George Staphos: Hi, there. Thanks, everyone. Thanks for taking my question, and congratulations on the progress. I wanted to dig into the pre-buy effect and materials And there are a couple of components to it. I think you said that the effect of the pre-buy was more or less five points mid-single-digits, in the second quarter and I recall the figure being one point in the first quarter and I think it was 1.five points at the materials level, Did I relay those correctly? And does that mean in essence, there is 6% or 6.5% that ultimately has to be destocked over the rest of the year. How should we interpret that? And why is there so much going on? Especially, it sounded like in Europe. Thank you, guys. Gregory S. Lovins: Yeah. Thanks, George. So in Q1, we talked about a relatively around a point of growth from customer inventory building. I think I mentioned earlier about half of our organic growth in Q2 we would estimate is related to inventory build. So in total, closer to five points of growth in the first half or at net first half about 2.5% growth for the whole half of the year. We would expect to see that come out in the second half as we said. So I think you would see that change from first half to second half. At the same time, from an organic growth perspective that will largely be offset in the second half by the fact that we will have more pricing activity. Action versus prior year, where we still had deflation in the first quarter carryover from last year. We will have more pricing impact year-over-year in the second half. I think to your point, we are seeing that more in Europe and Asia. That is where we are seeing more of the inflationary pressures as well. As well as just more customer concern, I think, about surety of supply. And as we move through the second quarter, we continue to see that inflation increase in the middle part of the quarter, obviously, it has been quite up and down since then. So customers are still seeing a pretty uncertain environment. And I think that is what led to a lot of the stock build that continued throughout the second quarter. Operator: Your next question comes from the line of John McNulty with BMO Capital Markets. Please proceed with your question. John McNulty: Yes. Good morning. Thanks for taking my question. So I guess maybe a couple of related points on the margin side. I guess can you help us to think about price/cost in the second half if you will catch up with pricing just given your expectations for cost to be kind of up in the high-single-digits? And then I guess somewhat related on the margin front in Solutions, you are kind of hitting a high-water mark. Anything special about that in terms of why you are kind of at these levels? Or is this kind of the new baseline now that you are starting to see volumes stabilize and IL starting to grow again? Gregory S. Lovins: Yeah. Thanks, John, for the question. So when we look at the second quarter from a price/cost perspective, and I will talk sequentially, we saw high-single-digit inflation from Q1 to Q2 and we had mid-single-digit price increase from Q1 to Q2. To help mitigate that in addition to, obviously, material engineering and our procurement teams continuing to work to mitigate that as well. So I think we largely mitigated the majority of that in the second quarter from a sequential perspective. When we look at Q2 to Q3, we would expect low-single-digit sequential inflation, largely carryover from what we saw as we move through the second quarter. But I will say it continues to be a pretty uncertain environment. So we have seen oil, like I said a minute ago, move up and down quite a bit over the last few weeks. But right now, our expectation is low-single-digit sequential inflation and low-single-digit sequential price as well from Q2 to Q3. If I shift to your second question on solutions margins, I think overall, there are a couple of drivers there. That team has continued to drive pretty significant productivity year-over-year. Certainly, that is having a benefit on our margins there. At the same time, it is a nice volume rebound. Our apparel business is growing mid to high-single-digits in the quarter as we lap some of the tariff implications from Q2 last year, with some strong growth in our Embelex platform, our high-value category there that we talked about earlier as well. Overall, it is both strong volume growth in apparel, as well as productivity across the business, and we did have a couple of small one-time types of benefits in the quarter but still strong underlying results. You may see a little bit of moderation in that margin in Q3. We still expect the second half to be above prior year. Operator: Your next question comes from the line of Jeff Zekauskas with JPMorgan. Please proceed with your question. Jeff Zekauskas: Thanks very much. two-part question. It sounds like you are gaining more traction with your customers and Intelligent Labels in general food category? Is it baked goods? Or frozen foods or are there themes that are allowing you to expand your reach And for Gregory, you have talked about inflation and employee costs. Is this one-time, or what is the rate? Or how large are your employee costs as a percentage of your cost base? Can you help frame the employee cost issue? Deon Stander: Thanks, Jeff Zekauskas. Let me deal with the first and Gregory can take the second. Thank you. We continue to have very strong we continue to have very strong conviction in the growth in the food segment as we move forward over the years to come. Because we see the return on investment at the retail level, to be so strong in all the pilots that we have done and some of the rollouts that have been underway for a while. I think the way I would characterize it, Jeff Zekauskas, is the initial focus has been really around bakery. it is simpler to implement. But we are, as you know, working through protein now, which has been more technically difficult to do, but where we brought our innovation to bear where I think we continue to sustain advantage. And then beyond protein i.e., the next category, really at the periphery of the store, will be perishable. i.e., the further perishable items. And I think those will follow suit. Certainly think that two things are also playing in thematically. So one is I think retail at an aggregate level is recognizing that the greater the urgency with which they digitize their stores overall to drive more of a digital platform to their stores, the more they are likely to succeed in driving the efficiencies and consumer connection they really desire. And clearly, technologies like IL play a very significant role in enabling that driving return on investment both from a labor productivity, a gross margin expansion and sales uplift. We have seen that consistently particularly in perishable foods. And so I think the only other thing I would say from our perspective is, you know, it is an area where we are going to continue to invest the scale of our customers that are now in pilot has continued to expand. Our pipeline has expanded in that regard. It includes a number of the U.S. retailers and European retailers. And also some areas very specifically where, for example, DSD deliveries are taking place in certain categories as well. So we have high conviction in that, and I see it as a longer term growth opportunity within our broader high-value category portfolio overall. Gregory S. Lovins: Yeah. And Jeff, on your second question, I think there are two areas of employee costs where we are seeing a headwind year-over-year. One is the normal year-over-year wage inflation that we see across the business. And that is more normal levels of what we have seen in the recent past. I think the other one is the larger one really this year from a year-over-year perspective is incentive compensation. So last year, clearly, we delivered below our targets, incentive comp payouts were well below target levels last year. And this year, we are on track at or above depending on the business to deliver on our targets. So a relatively sizable incentive compensation headwind. When I look at the overall earnings growth formula kind of year-over-year, from an order of magnitude perspective, our productivity is basically largely offsetting our wage inflation and our incentive compensation. So that is roughly the size of those headwinds versus our productivity. Operator: Your next question comes from the line of Joshua David Spector with UBS. Please proceed with your question. Josh Spector: Hi. I wanted to just dig into the organic growth guidance. So the 3% to 4% range, if we try to unpack that a bit, I mean, my calculations here would say pricing in the second half is up call it, 3% maybe to 4%. And you have that, call it, 3%-ish headwind in the second half. So, therefore, volumes then at the base level, excluding the kind of destocking dynamics, are maybe flattish. Is that how you would frame it? Because you sound more positive on some of the higher growth areas within materials, RFID improving. I do not know if there is an offset that we are missing. Thanks. Gregory S. Lovins: Yeah. So I think, Josh, when you look first half to second half, first half organic growth is around 4.5% on the full first half basis. With a couple points of that, we would estimate from stocking as we have talked about here. And we had, as I said earlier, a little bit of price down particularly in the first quarter as we start to lap some of that deflation from prior year. So volume growth, volume/mix growth in the first half of the year in that low to mid-single-digit range. I think second half is somewhat similar from a volume/mix perspective but we have the destocking impact coming in that is a headwind in the second half. Largely offset by the fact that price now, we are no longer lapping the deflation from prior year. So the price actions that we are taking are a positive year-over-year in the second half. So think underlying volume/mix trends relatively similar, low to low to mid-single-digits in the first and second half. With a little bit of price differential between the halves as well that is impacting that. In addition to the stocking impact. Operator: Your next question comes from the line of Matthew Burke Roberts with Raymond James. Please proceed with your question. Matt Roberts: Deon, I appreciate the comments you have given so far on food, but if I could dive a little bit deeper on the contribution in the second half. Specifically on just how far has that rollout progressed? Is there still incremental from Walmart, I know that is a big beginning here in the second half, but what percent of that initial rollout should we be thinking about in 2026? Yeah. You are breaking up, Matt, you are breaking up on us. Can you start again from the top? I missed the question, Matt. Yeah. Is that better now? Yes. Try that. Okay. Basically, I am looking to get a little bit more granular on the food contribution specifically. Specifically on Kroger, how far along has that rollout progressed? Is there anything incremental in second half from that? And from Walmart, I know that begins to ramp in the second half. But any percentage terms you could frame around that rollout in 2026 and into 2028. And I believe a third grocer here has announced the pilot, and you referenced some pilots in grocery. So how material are those new programs in second half? Or how long would you expect them to be in pilot phase before any expansion given it seems like food is certainly newer, but perhaps broadening faster than other categories? Deon Stander: Yeah. Let me end where you did, at the end part of your question, and I will address the rest. Yes. I think there is certainly much more accelerated interest from customers They can clearly see the benefit, the returns they get. As I said on labor productivity, gross margin expansion and sales uplift as well. Specifically on Kroger, rollout continues to go as they planned. And the second half of the year, the only thing that is different that we said we would be working on with them, which we are, which is really the protein piloting. And as that goes successfully in the second half of the year, we would be looking to roll that out as we are into the start of next year. On Walmart, you know, I think my observation on that customer that continues to be that they are really committed to the technology. You can see it roll out across all of their stores. In terms of both general merchandise and apparel, and increasingly now in the pro—sorry, in the food area as well. And they continue to see their return on investment of the technology as well both in those areas as well as in food, typically with kind of large-scale deployments. Timelines can vary slightly, but our current assumptions for commercial rollout with this customer to begin in the second half of 2026, and we are working very closely with them now on key deployment milestones to ensure a successful implementation. As it relates to the other customers, yes, the pilots are accelerating. I am not going to detail, but which specific customers they are, And we anticipate that largely those will manifest in 2027 and beyond. And that is when you would see the benefit of those positive pilots turning into broader implementation and rollouts. Operator: Your next question comes from the line of John with Jefferies. Please proceed with your question. John Dunigan: Hey Deon, Gregory. Really appreciate all the details, and congrats on a good quarter. Want to go back to the customer inventory build. It sounded like there was some carryover from the inventory build in Q1. But did you see the stocking through the quarter? And has it progressed into Q3? Or are you already seeing some of that destocking? And related, was there any portion of the 10% apparel and general retail RFID growth that was tied to the customer inventory build? It did not sound like it from your comments, but just wanted to confirm. And then one last point of clarification, Gregory. I just want to make sure I heard you correctly on the 3Q EPS you said it was $0.50 lower quarter over quarter. Did I get that right? Gregory S. Lovins: Yes. Thanks for the question, John. So on stocking, as we said in the first quarter, we had about a $0.05 earnings per share impact that we estimated from stocking that started really kind of early to mid-March in the first quarter. We saw that continue as we talked about last quarter through April. At the time, we thought it would reverse later in the quarter. But we continue to see more uncertainty as we move through the quarter and inflation continuing to increase in the middle part of the quarter. We saw that stocking really continue not only through April, but also through May. And it is a little bit different by region, but Europe and Asia where we have seen most of that stocking impact, we saw some of it continue in June—early June, but largely June started to more normalize from a volume impact. And then we are expecting that or a large portion of that to come out in the third quarter, and we have started to see signs of that here the first few weeks of July as well. So I think our expectation is that will continue as we move through the rest of this quarter. None of that is in solutions. It is really a Materials Group phenomenon that we are seeing here. We really have not seen that stocking impact on the solutions or Intelligent Labels side of the business. From the sequential headwind, basically, roughly a $0.25 benefit we got from our customers' increase in their inventory in Q2, our outlook would be that assumes that roughly a $0.25 headwind in the third quarter. So that is the $0.50 Q2 to Q3 sequential headwind that we will have from an earnings perspective. And, again, that is an estimate based on what we are seeing right now. As I said, with that destocking starting and we will obviously, you know, see how the situation evolves as we go through the quarter. But right now, that is our estimate of what the Q3 impact would be. Deon Stander: John, let me just reiterate particularly in apparel and general retail, there was no impact of inventory stocking or building that Gregory spoke about. Most of that growth was really driven by new program rollouts that we have had that we talked about in the past, Some of them are delivering as we go through the second quarter into the third and fourth quarters as well. Operator: Your next question comes from the line of Mike Roxland with Truist Securities. Please proceed with your question. Michael Roxland: Yeah. Thank you, Deon, Gregory, for taking my question. A really high level question here. I just want to get a sense, Deon, from you of how you think about volume growth in your base label business. A number of leading CPGs recently said they are done lowering prices. They are going to focus on raising prices at the expense of volumes. And then, really, it is all being driven by the fact that they have seen margins compress over the last several quarters as a result of lowering prices. So how should we think about how this renewed focus on price affects volumes? And how does that affect the materials business? Is it you know, could you see buying, you know, the materials business shift from a GDP plus business to a GDP or GDP minus? Particularly if you see CPGs more aggressively going after price? Any color you can provide would be helpful. Thank you. Deon Stander: Yes. Thanks, Mike. I mean, we have seen the cycle go through this when it comes to CPG volumes. You are right. CPG volumes, I think, largely over the last couple of years have been relatively flat. Slightly down. But let's say, we did see some encouraging signs in the first quarter in certain segments of CPG volume. Home and Personal Care certainly grew a little bit. But I think partly the continued weighing in of inflationary impact has no doubt had the CPGs weighing up how they balance out promotional activity for volume relative to pricing and the consumer impact thereof. And we do not necessarily see that fundamentally changing as we go through the rest of this year, given the uncertain environment we see. I will say, our best measure that we look at is we typically look at both GDP and then we also look at retail sales. Retail sales. I think we provided some in detail in the materials. You know, GDP has, I think, moved slightly lower globally; it varies by region. Retail sales on the aggregate are around 1% growth at the moment overall. And if you think about our business being largely consumer-staples-led in our base label business, some elements of logistics going into it as well. So we do not see fundamentally a big shift in our volumes, the base label volumes. Gregory talked about kind of low-single-digit volume growth as we move through the rest of the year. We do not anticipate it to be very different from that. The only other thing I would say in there is we continue to take share in this business in our base label business overall. And, you know, we made a significant effort to make sure that as we think about how we service our customers, really anchoring around what it takes to service excellence and differentiation starting to yield some benefit. Also lent a lot more, and you have heard me talk about this, into our innovation to make sure we continue to secure differentiation moving forward. So as an example, you know, a lot of the work that we have seen around the growth in the base label business to come from largely filmic products. We tend to have a leadership advantage in our filmic products. There is also a lot of impact that we are seeing from sustainability, recyclability. And some of our innovation like our AD CleanGlass and AD CleanFiber are really starting to resonate with customers. And so the combination of those helps us drive more share gains, which I think is very durable. And then there is a secondary element, which is typically during more uncertain times, Mike, you tend to see customers when there are uncertain times in those areas, particularly in Europe and Asia, with a flight to market leaders for surety really. We certainly do benefit a little bit from that impact as well. Operator: Your next question comes from the line of Anthony Pettinari with Citi. Please proceed with your question. Anthony Pettinari: Good morning. A lot of my questions have been asked, but I am just wondering with the reinstatement of the full year guide, is it fair to think of that as just kind of a one-time action to help us understand the impact of the pre-buy and the reversal over the full year? Or would you anticipate going back to a full year guide? Or just kind of how do you think that? Gregory S. Lovins: Yeah. Thanks, Anthony. So I think there are obviously a lot of drivers when it comes into thinking about our guidance. I think the first one for us is that our business has been operating very well. Our teams have been doing a really nice job managing through what has been a pretty uncertain environment. And delivering solid top line growth, delivering strong productivity, and generally just increasing the pace of our underlying pace of our earnings growth. So we feel confident and good about what our teams are doing to perform there. And second, I think as Deon mentioned earlier, we have got a little bit more uncertainty as we have talked about here with timing of destocking given continued uncertainty in the Middle East and how that will play out in the quarter and will we see more destocking or less destocking between Q3 and Q4? So we think it is a little bit better for us to give full-year guidance at this stage. Our intention is not to go back and forth between different guidance time horizons. In the future, though. So, you know, we will—we are obviously not talking about 2027 guidance here, but our intention would be to stay with one approach as we go forward. Operator: Our final question comes from the line of George Staphos with Bank of America. Please proceed with your question. George Staphos: Hi, everyone. A point of clarification and then a question on Intelligent Labels. So Greg, you know and I think John just asked the question. So if we are assuming a $0.50 headwind because the up $0.25 becomes a down $0.25, and recognizing there is not scalpel-like precision with this. It was not intended that way on your side. Since we had a $0.05 in the first quarter that was going to reverse, should we worry instead that it is $0.30 that has to come out, and therefore, more of like a $0.60 sequential downtick in Q3. And then Deon, the question on IL, I know you have been asked this in the past likely Do you see AI as an enabler and an accelerator for Intelligent Labels, or might it be, in some ways, a competing technology or enabler of competing technologies and so there is less of a pie to shoot after, recognizing the pie is big. for Intelligent Labels. Thank you, and good luck in the quarter. Gregory S. Lovins: Thanks, George. Thanks, George. As you said, we had about a $0.30 impact in the first half. That is what we estimate the impact of stocking was at our customers. And, you know, we are we are doing our best to try to triangulate around how we think that will come out between Q3 and Q4. Our view right now is $0.25 or so of that comes out in the third quarter, and we have got a little bit of hangover of the rest of that in the fourth quarter. Again, it is a little tough to call, especially given how much of that stocking happened in Europe, where we have seen the bulk of the inflation and the impacts there. Especially with the holiday period that starts in August. So we will see how that settles out. But that is our best-case assumption or our best guess right now on what we are seeing so far in July. How we think that plays out and what we are hearing from our customers, through the rest of the quarter. Deon Stander: Yeah. And, George, on your question, is AI an accelerator for IL? Yes. I believe it is. Absolutely. And maybe I will just give you a slight context that I still think the biggest secular trend we are going to see over the next five or so years is the continued digitization of industries. and items. And if you think about it from an IL perspective, every time an item is tagged at source and has data available about how it was made, where it has made its way through the supply chain into retail, how it gets used in retail, and ultimately to the end consumer in terms of consumer use and disposal. You are generating significantly more data at the item level than ever historically. Now AI, I think, is going to be an enabler to parse out and make a lot more sense and inference from that data. That is the real benefit it brings. So in some ways, if you think about it, if AI helps you make more sense of data, at, for example, a retail level, you now have much more ability to make more surgical decisions about what you want to do with items which allows you to expand your ROI, based on the work that you have done using IL, which in itself, then creates a flywheel for more IL adoption. that is the hypothesis that I have, and I think we are starting to see that play out. I would say stepping back at a broader level for AI for Avery Dennison, think I have spoken in the past, George, around, you know, we are seeing that both as a driver for efficiency internally and for productivity, a driver to help us accelerate innovation outcomes quicker and then also to help us solve customer problems to accelerate our growth algorithm. We have invested and we are investing in it. We have a chief digital officer that we brought on board, and we have actually dedicated teams to make sure that the big bets that we are taking will ultimately manifest in driving our growth algorithm or improving our profitability. Operator: Mister Gilchrist, there are no further questions at this time. I will now turn the call back to you for any closing remarks. William R. Gilchrist: Thank you, Ellen. On behalf of everyone at Avery Dennison, I want to thank you all for joining today's call and for your continued interest in our company. As always, we are happy to address any follow-up questions you may have. Thank you again, and this concludes today's conference call. Operator: Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Before you buy stock in Avery Dennison, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Avery Dennison wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. 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Avery Dennison (AVY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Organic sales growth accelerated to 8% in Q2, driven by a combination of underlying market strength and significant customer inventory pre-buying in the Materials Group. Management attributes the strong performance to a step change in sales and earnings growth, even when excluding the temporary tailwind from customer stocking. Materials Group growth of 10% was fueled by high-single-digit volume/mix and the initial implementation of pricing actions to mitigate rising raw material inflation. High-value categories returned to mid-single-digit growth, led by specialty labels and the Embelex platform, which benefited from robust World Cup demand. Operational excellence and productivity initiatives successfully offset higher employee-related costs and wage inflation, leading to expanded adjusted EBITDA margins. The company is leveraging its innovation-led differentiation to gain market share, particularly in filmic products and sustainable solutions like AD CleanGlass. Management noted that customer pre-buying was most pronounced in Europe and Asia due to concerns over supply surety and accelerating raw material costs. Full-year 2026 adjusted EPS guidance is set at $10.00 to $10.30, assuming organic sales growth of 3% to 4% and a largely neutral impact from inventory management. Management anticipates a significant sequential earnings headwind of approximately $0.50 in Q3 as the majority of the Q2 customer inventory build unwinds. Raw material inflation is expected to remain high-single-digits year-over-year in the second half, requiring continued pricing agility and reengineering efforts. Intelligent Labels growth is projected to accelerate in the back half of 2026, driven by a major U.S. grocery retailer rollout and deepening apparel adoption. The company plans to maintain a disciplined capital allocation strategy, targeting 100% free cash flow conversion while continuing share repurchases and dividend growth. Customer inventory pre-buys added an estimated $0.25 to Q2 earnings, creating a timing-related risk for the second half of the year. Logistics sales in the Intelligent Labels platform declined double digits as the company lapped outsized share gains and faced softer demand in that specific segment. Higher incentive compensation serves as a year-over-year headwind as the company normalizes from lower 2025 payout levels. Geopolitical uncertainty remains a primary variable affecting the timing of inventory destocking and raw material price volatility. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects a second-half ramp driven by new program rollouts in apparel and a meaningful contribution from the food sector. Logistics will remain a challenge for the rest of the year due to difficult 2025 comparisons, though new pilots are expanding. Approximately half of Q2 organic growth was attributed to stocking, totaling about 2.5% for the first half of the year. The $0.25 Q2 benefit is expected to become a $0.25 headwind in Q3, representing a $0.50 sequential swing. Initial focus is on bakery due to implementation simplicity, with protein piloting currently underway for a 2027 rollout. A major commercial rollout with Walmart is expected to begin in the second half of 2026, focusing on key deployment milestones. Management views AI as a significant accelerator that helps retailers parse item-level data to improve ROI, creating a flywheel for further RFID adoption. Internally, AI is being used to drive productivity, accelerate innovation, and solve complex customer supply chain problems.

Avery Dennison (AVY) came out with quarterly earnings of $2.89 per share, beating the Zacks Consensus Estimate of $2.47 per share. This compares to earnings of $2.42 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +17.00%. A quarter ago, it was expected that this maker of office products would post earnings of $2.41 per share when it actually produced earnings of $2.47, delivering a surprise of +2.49%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Avery Dennison, which belongs to the Zacks Containers - Paper and Packaging industry, posted revenues of $2.46 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.56%. This compares to year-ago revenues of $2.22 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Avery Dennison shares have lost about 8.1% since the beginning of the year versus the S&P 500's gain of 6.9%. While Avery Dennison has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Avery Dennison was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.51 on $2.31 billion in revenues for the coming quarter and $10.00 on $9.27 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Containers - Paper and Packaging is currently in the bottom 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Karat Packing (KRT), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.51 per share in its upcoming report, which represents a year-over-year change of -10.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Karat Packing's revenues are expected to be $135 million, up 8.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avery Dennison Corporation (AVY) : Free Stock Analysis Report Karat Packaging Inc. (KRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Avery Dennison Corporation’s AVY adjusted earnings of $2.89 per share for the second quarter of 2026 grew 19.4% year over year. The figure surpassed the Zacks Consensus Estimate of $2.47.Including one-time items, the company has reported earnings per share of $2.67 compared with the year-ago quarter’s $2.41. Avery Dennison Corporation price-consensus-eps-surprise-chart | Avery Dennison Corporation Quote Revenues increased 10.9% year over year to $2.46 billion and beat the consensus estimate of $2.29 billion. Strong volume growth, productivity gains, and favorable pricing and raw-material dynamics supported the results. Organic sales rose 7.6%. The cost of sales in the quarter increased 9.6% year over year to $1.73 billion. Gross profit rose 14.1% to $729.4 million. The gross margin came in at 29.6%, up from the prior-year quarter’s 28.8%.Marketing, general and administrative expenses were $352.4 million compared with $394.8 million in the year-ago quarter. Adjusted operating profit increased to $334.6 million from $286.7 million. The adjusted operating margin was 13.6% compared with 12.9% in the prior-year quarter.Adjusted EBITDA advanced 14.6% to $421 million. The corresponding margin improved 50 basis points to 17.1%. Volume, productivity and the net benefit of pricing and raw-material costs supported profitability, though higher employee-related expenses remained a headwind. Revenues in the Materials Group segment increased 15.9% year over year to $1.80 billion in the reported quarter. Our estimate was $1.61 billion. On an organic basis, sales improved 9.7%, driven by high-single-digit volume and mix growth, and a low-single-digit increase in pricing. The segment’s adjusted operating profit increased 17.1% year over year to $284 million. Our estimate was $258 million. The adjusted operating margin was 15.8% compared with 15.6% in the prior-year quarter.Revenues in the Solutions Group declined 0.5% year over year to $667 million. Our estimate was $672 million. On an organic basis, sales improved 2.6%, with overall apparel categories registering high-single-digit growth.The segment’s adjusted operating income increased 14.2% year over year to $76.5 million. Our estimate was $67 million. The adjusted operating margin expanded to 11.5% from 10% in the year-ago quarter. The company returned $347 million in cash to shareholders through share repurchases and dividend payments in the first half of 2026. AVY repurchased 1.2 million shares, with payments totaling $198 million.Avery Dennison ended the second quarter of 2026 with cash and cash equivalents of $227 million compared with $216 million at the end of the year-ago period.The company’s long-term debt and finance leases were $3.18 billion at the end of the second quarter, up from $2.63 billion in the year-ago period. Its net-debt-to-adjusted-EBITDA ratio was 2.3X.AVY realized approximately $34 million in pre-tax savings from restructuring actions in the first half of 2026. The company also incurred around $34 million in pre-tax restructuring charges. Avery Dennison expects reported earnings of $9.40-$9.70 per share for 2026. Adjusted earnings are projected between $10 and $10.30 per share. The outlook assumes reported sales growth of 5-6% and organic growth of 3-4%.AVY expects much of the customer inventory stocking recorded in the first half to unwind during the second half, with most destocking anticipated in the third quarter. The company consequently expects a greater-than-historical sequential earnings decline in that period. It is also targeting adjusted free cash flow conversion of approximately 100% and more than $60 million in incremental restructuring savings. AVY shares have gained 1.5% in the past year compared with the industry’s growth of 5.2%. Image Source: Zacks Investment Research Avery Dennison currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Packaging Corporation of America PKG reported second-quarter 2026 adjusted earnings of $2.35 per share, down 5.2% year over year but beating the Zacks Consensus Estimate of $2.31. The bottom line also came above Packaging Corp’s guidance of $2.33.Packaging Corp’s revenues increased 14.7% year over year to $2.49 billion and surpassed the consensus estimate of $2.40 billion by 3.6%. Total corrugated products shipments reached an all-time quarterly record, rising 24.3% both per day and in total from the prior-year quarter. Crown Holdings, Inc. CCK posted second-quarter 2026 adjusted earnings of $2.49 per share, up 15.8% year over year. The figure surpassed the Zacks Consensus Estimate of $2.15 by 15.81%. Crown Holdings revenues increased 16.5% to $3.67 billion and beat the consensus estimate of $3.34 billion by 9.88%. Global beverage can volumes rose 5%, led by 6% growth in Europe and 5% growth in the Americas. This was partially offset by softer demand in Latin America. Sonoco Products Company SON reported adjusted earnings of $1.51 per share in the second quarter of 2026, beating the Zacks Consensus Estimate of $1.47 by 2.72%. The figure rose 10.2% from $1.37 in the year-ago quarter. Pricing actions, favorable foreign-exchange movements and productivity gains helped offset softer volume/mix during the quarter. Sonoco’s revenues of $1.885 billion declined 1.3% year over year and missed the consensus mark of $1.886 billion by 0.05%. Sonoco’s top line declined from the prior-year period primarily due to the absence of sales from the ThermoSafe business, which was divested in November 2025. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Avery Dennison Corporation (AVY) : Free Stock Analysis Report Sonoco Products Company (SON) : Free Stock Analysis Report Packaging Corporation of America (PKG) : Free Stock Analysis Report Crown Holdings, Inc. (CCK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: Reported sales up 11% year-over-year; organic sales growth of 8%. Adjusted EPS: $2.89, up 19% year-over-year. Adjusted EBITDA Margin: 17.1%, up 50 basis points year-over-year. Adjusted Free Cash Flow: $365 million in the quarter. Materials Group Organic Sales: Up 10% year-over-year, driven by high single-digit volume mix growth. Materials Group Adjusted EBITDA: Up 17% year-over-year, with margins up 20 basis points. Solutions Group Organic Sales: Up 3% year-over-year. Solutions Group Adjusted EBITDA Margin: 18.6%, expanding 150 basis points year-over-year. Enterprise Intelligent Labels Sales: Up low single digits year-over-year. Share Repurchases: $138 million in the quarter. Dividends: $76 million in the quarter. Full-Year 2026 Adjusted EPS Guidance: $10 to $10.30. Full-Year 2026 Organic Sales Growth Guidance: 3% to 4%. Warning! GuruFocus has detected 2 Warning Sign with AVY. Is AVY fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Strong second-quarter organic sales growth of 8% year-over-year, driven by high single-digit volume mix growth. Adjusted EBITDA margins expanded across both segments, with Materials Group up 20 basis points and Solutions Group up 150 basis points. Adjusted EPS grew 19% year-over-year to $2.89, supported by higher volume and productivity. Robust free cash flow generation of $365 million in the quarter, enabling increased share repurchases and dividend growth. Intelligent Labels platform showed strong performance in apparel and general retail with sales up approximately 10%, and food segment expected to accelerate in the second half. Customer inventory pre-buying in Materials Group persisted longer than anticipated, creating uncertainty about the timing and magnitude of destocking in the second half. Logistics segment within Intelligent Labels experienced a double-digit sales decline due to lapping outsized share gains from 2025 and softer customer demand. Raw material costs saw high single-digit sequential inflation in Q2, with expectations of continued high single-digit year-over-year inflation in the second half. Employee-related costs, including wage inflation and higher incentive compensation, created headwinds partially offset by productivity actions. Vestcom sales were down slightly year-over-year as the company lapped a major customer rollout from 2025. Here are the key highlights from the Avery Dennison Corp (NYSE:AVY) Q2 2026 earnings call, focusing on the most significant Q&A exchanges. Q: Can you provide more granularity on the growth outlook for Intelligent Labels for 2026, particularly regarding the major end-market verticals like apparel, general retail, food, and logistics? A: Deon Stander (CEO): We anticipate growth to ramp in the second half of the year. In apparel and general retail, we expect solid growth driven by new program rollouts. In logistics, we expect a continued share and volume challenge compared to 2025's outsized gains, while we expand pilots. In food, we expect a much more meaningful contribution in the second half, driven by the significant retailer rollout and expanding activity with other customers. Q: Can you help us think about price/cost in the second half and if you will catch up with pricing given expectations for high single-digit cost inflation? Also, on Solutions margins, is the high watermark the new baseline? A: Gregory Lovins (CFO): For price/cost, we saw high single-digit inflation from Q1 to Q2 and had mid-single-digit price increases to mitigate it. For Q2 to Q3, we expect low single-digit sequential inflation and low single-digit sequential price. On Solutions margins, the strong performance is driven by significant productivity and a volume rebound in apparel. We had some small one-time benefits, but the underlying results are strong. We expect a slight moderation in Q3, but the second half should still be above the prior year. Q: It sounds like you're gaining more traction with customers in the general food category for Intelligent Labels. Is it baked goods or frozen food? And can you frame the employee cost issue? A: Deon Stander (CEO): The initial focus has been around bakery, but we are now working through protein, which is more technically difficult. Beyond protein, the next categories will be other perishable items. Retailers recognize the urgency to digitize stores, and IL plays a significant role in driving ROI, particularly in perishable foods. Gregory Lovins (CFO): The employee cost headwind comes from two areas: normal year-over-year wage inflation and a larger headwind from incentive compensation, as payouts are expected to be at or above target this year versus below target last year. Productivity is largely offsetting these headwinds. Q: Can you dig deeper into the food contribution in the second half, specifically regarding the Kroger and Walmart rollouts? A: Deon Stander (CEO): Kroger's rollout continues as planned, with protein piloting in the second half, which could lead to a broader rollout next year. Walmart remains committed to the technology, and our current assumption is for a commercial rollout in food to begin in the second half of 2026. Pilots with other customers are accelerating, and we anticipate those will manifest in broader implementations in 2027 and beyond. Q: Did the customer inventory build continue through the quarter and into Q3? And was any of the 10% apparel and general retail RFID growth tied to this build? A: Gregory Lovins (CFO): The stocking continued through April and May, with June starting to normalize. We've started to see signs of destocking in the first few weeks of July, and we expect a large portion of the unwind in Q3. Deon Stander (CEO): There was no impact of inventory stocking in the apparel and general retail RFID growth. That growth was driven by new program rollouts. Q: How do you think about volume growth in your base label business given that some leading CPGs are focusing on raising prices at the expense of volumes? A: Deon Stander (CEO): We don't see a fundamental shift in our base label volumes. We anticipate low single-digit volume growth. We continue to gain share through service excellence and innovation, particularly in filmic products and sustainability-focused solutions like AD CleanGlass. During uncertain times, customers also tend to flock to market leaders for surety of supply, which benefits us. Q: With the reinstatement of the full-year guide, is this a one-time action, or would you anticipate going back to a full-year guide in the future? A: Gregory Lovins (CFO): We felt it was better to give a full-year guide now due to the uncertainty in timing of the destocking. Our intention is not to go back and forth between different guidance time horizons. We would plan to stay with one consistent approach going forward. Q: Do you see AI as an enabler and accelerator for Intelligent Labels, or could it be a competing technology? A: Deon Stander (CEO): I believe AI is an accelerator. The biggest secular trend is the digitization of items. Every time an item is tagged, it generates data. AI will be an enabler to make more sense of that data, allowing for more surgical decisions that expand the ROI of IL, creating a flywheel for more AI adoption. We are investing in AI to drive internal efficiency, accelerate innovation, and solve customer problems. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Adhesive manufacturing company Avery Dennison (NYSE:AVY) will be reporting earnings this Thursday before market hours. Here’s what to look for. Avery Dennison beat analysts’ revenue expectations last quarter, reporting revenues of $2.30 billion, up 7% year on year. It was a strong quarter for the company, with a narrow beat of analysts’ organic revenue estimates and a narrow beat of analysts’ EBITDA estimates. Is Avery Dennison a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Avery Dennison’s revenue to grow 3.4% year on year, improving from its flat revenue in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Avery Dennison has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Avery Dennison’s peers in the industrials segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Crown Holdings delivered year-on-year revenue growth of 16.5%, beating analysts’ expectations by 9.3%, and Packaging Corporation of America reported revenues up 14.7%, in line with consensus estimates. Crown Holdings traded up 3% following the results while Packaging Corporation of America was also up 2.5%. Read our full analysis of Crown Holdings’s results here and Packaging Corporation of America’s results here. Over the last year or so, investors' attention has moved from one major market theme to the next, spanning AI disruption and surging infrastructure investment to geopolitical tensions, interest rates, and the health of the broader economy. While some of the industrials stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.3% on average over the last month. Avery Dennison is up 3.6% during the same time and is heading into earnings with an average analyst price target of $199.60 (compared to the current share price of $169.15). WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.

Graphic Packaging (GPK) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 4. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This packaging company is expected to post quarterly earnings of $0.11 per share in its upcoming report, which represents a year-over-year change of -73.8%. Revenues are expected to be $2.19 billion, down 0.6% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 11.47% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Graphic Packaging, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -3.99%. On the other hand, the stock currently carries a Zacks Rank of #4. So, this combination makes it difficult to conclusively predict that Graphic Packaging will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Graphic Packaging would post earnings of $0.06 per share when it actually produced earnings of $0.09, delivering a surprise of +50.00%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Graphic Packaging doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Containers - Paper and Packaging industry, Avery Dennison (AVY), is soon expected to post earnings of $2.47 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +2.1%. This quarter's revenue is expected to be $2.29 billion, up 3.1% from the year-ago quarter. The consensus EPS estimate for Avery Dennison has been revised 0.1% higher over the last 30 days to the current level. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -0.44%. This Earnings ESP, combined with its Zacks Rank #3 (Hold), makes it difficult to conclusively predict that Avery Dennison will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report Avery Dennison Corporation (AVY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research