Avery Dennison Corp (NYSE:AVY) Q3 2025 Earnings: EPS Beats, Revenue Misses Estimates

Avery Dennison Corp (NYSE:AVY) reported its third-quarter 2025 financial results, delivering a performance characterized by earnings that surpassed analyst expectations while revenue fell slightly short of consensus estimates. The company's results reflect a mixed operational environment where strategic execution and cost controls helped buoy profitability despite modest top-line challenges.

Earnings and Revenue Performance

The materials science company reported adjusted earnings per share of $2.37 for the quarter, exceeding the analyst consensus estimate of $2.35. This represents a 1.7% increase compared to the adjusted EPS of $2.33 reported in the same quarter last year.

However, the company's revenue of $2.22 billion came in below the estimated $2.24 billion, marking a modest shortfall against market expectations. The quarterly sales figure represents a 1.5% increase from the $2.18 billion reported in the third quarter of 2024.

Key financial metrics from the quarter include:

• Adjusted operating income of $281.1 million
• Adjusted EBITDA of $365.1 million
• Net sales growth of 1.5% year-over-year
• Reported net income of $166.3 million, down from $181.7 million in Q3 2024

Market Reaction and Price Action

The market response to the earnings release has been cautiously negative in pre-market trading, with the stock declining approximately 1.8%. This reaction appears to reflect investor focus on the revenue miss despite the earnings beat. The pre-market movement contrasts with the stock's recent performance, which had shown modest gains over the past week (+2.1%) and two-week period (+1.3%).

Segment Performance and Business Highlights

The company's performance varied across its business segments, revealing divergent trends in its core operations. The Materials Group reported sales of $1.5 billion, representing a 1.2% increase on a reported basis but declining 1.9% organically. The segment demonstrated improved profitability with adjusted operating margin expanding 40 basis points to 15.2%.

The Solutions Group showed stronger organic growth, with sales increasing 3.6% organically to $700 million. The segment's high-value categories, including Intelligent Labels, grew at a high-single-digit rate, with Vestcom and Embelex both posting growth exceeding 10%. However, the segment faced margin pressure, with adjusted operating margin declining 130 basis points to 10.0%.

Capital Allocation and Strategic Initiatives

Avery Dennison maintained its disciplined approach to capital deployment, returning $670 million to shareholders through share repurchases and dividends during the first three quarters of 2025. The company repurchased 2.5 million shares at a total cost of $454 million through the third quarter.

The company also completed strategic moves to strengthen its portfolio, including the acquisition of Taylor Adhesives from Meridian Adhesives Group for $390 million in October. This acquisition expands the company's presence in the specialty adhesives market for the U.S. flooring industry.

Forward Guidance and Analyst Expectations

Looking ahead, management provided fourth-quarter 2025 guidance projecting adjusted earnings per share between $2.35 and $2.45, excluding an estimated $0.20 per share impact from restructuring charges and other items. This outlook compares favorably to analyst estimates for Q4 2025 revenue of $2.29 billion and EPS estimates that align with the company's guidance range.

For more detailed earnings information and future estimates, investors can review the comprehensive data available on the Avery Dennison earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The information presented should not be interpreted as a recommendation to buy or sell any security. Investors should conduct their own research and consult with financial advisors before making investment decisions.