Q3 2025 Avery Dennison Corp Earnings Call Transcript
Key Points
- Avery Dennison Corp (AVY) delivered a solid third quarter with earnings up 2% year over year, exceeding the midpoint of expectations.
- The company successfully mitigated direct cost increases through strategic sourcing adjustments and select pricing surcharges.
- Materials Group achieved margin expansion, with margins up 50 basis points year over year due to operational excellence and productivity focus.
- Solutions Group delivered organic sales growth of 4%, driven by high single-digit growth in high-value categories.
- A major partnership with Walmart was announced, leveraging Avery Dennison's RFID innovation in fresh grocery categories, indicating significant growth potential.
- Ongoing trade policy changes continue to impact the business, particularly affecting apparel and general retail market segments.
- Solutions margins were down 90 basis points compared to the prior year, impacted by higher employee costs and network inefficiencies.
- Materials Group sales were down 2% on an organic basis, with modest volume mix growth offset by deflation-related price reductions.
- General retail categories experienced tariff-related softness, with sales down mid-teens, impacting Intelligent Label sales.
- The company anticipates continued constraints on growth due to trade policy uncertainty, particularly in apparel and general retail segments.
Ladies and gentlemen, welcome to Avery Dennison's earnings conference call for the third quarter ended on September 27, 2025. (Operator Instructions) As a reminder, this webcast is being recorded and will be available for replay on the Avery Dennison Investor Relations website.
I'd now like to turn the call over to William Gilchrist, Avery Dennison's Vice President of Investor Relations. Please go ahead, sir.
Thank you, Karina, and welcome to Avery Dennison's third-quarter 2025 earnings conference call. Please note that throughout today's discussion, we'll be making references to non-GAAP financial measures. The non-GAAP measures that we use are defined, qualified, and reconciled from GAAP on Schedules A4 to A8 of the financial statements accompanying today's earnings release.
We remind you that we'll make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These forward-looking statements are
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