Avery Dennison outlines 6% Q1 2026 EPS growth target as high-value category mix accelerates

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• Expects restructuring benefits to be somewhat balanced across the year

  80% confidence

• Management is not happy with the organic growth trajectory over the last couple of years

  80% confidence

• Given key economic indicators remain largely consistent with 2025 levels, the company is not planning for any macroeconomic tailwinds in the near term

  80% confidence

• Temporary savings headwind is on an order of magnitude basis probably pretty similar to the size of the restructuring actions, that $50 million

  80% confidence

• High-value categories margins are a number of points above average, significantly above the base categories

  80% confidence

• Not happy with the way organic growth trajectory has been over the last couple of years

  80% confidence

• Company continues to drive ongoing productivity all the time in terms of ELS savings, looking at reducing scrap, being more efficient in operations

  80% confidence

• Q4 delivered solid adjusted earnings per share of $2.45, up 3% compared to prior year

  80% confidence

• High-value categories helped balance base categories, which were down low single digits in the quarter, lower than expected, on softer customer volumes

  80% confidence

• Ongoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation

  80% confidence

• The company expects restructuring savings of approximately $50 million as it continues to execute its productivity playbook, and expects normalization of a majority of 2025 temporary savings, largely related to lower incentive compensation costs

  80% confidence

• Higher working capital was due to high-value category mix, and CapEx will support both productivity and future capacity

  80% confidence

• The Walmart rollout would ramp in Q4 2026 and accelerate into 2027

  80% confidence

• High-value categories helped balance base categories, which were down low single digits in the quarter due to softer customer volumes

  80% confidence

• Apparel business saw a 7% decline, greater than anticipated, primarily due to changes in retailer ordering behavior amid tariff uncertainty

  80% confidence

• The temporary savings headwind is on an order of magnitude basis probably pretty similar to the size of the restructuring actions, that $50 million

  80% confidence

• High-value categories in Solutions Group provided necessary offset to base solutions which continue to be impacted by tariff-related uncertainty

  80% confidence

• The Walmart announcement increased pipeline interest in Intelligent Labels

  80% confidence

• High-value categories in Solutions Group make up 60% of the portfolio

  80% confidence

• Ongoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation, strengthen service and quality, shorten innovation cycles and provide more data-driven solutions

  80% confidence

• Higher working capital was due to high-value category mix, and CapEx will support both productivity and future capacity

  80% confidence

• Vestcom grew over 10% in Q4

  80% confidence

• Ongoing investments in digital capabilities, automation, and AI will enable additional operational productivity and fixed cost innovation, strengthen service and quality, shorten innovation cycles and provide more data-driven solutions

  80% confidence

• The temporary savings headwind is on an order of magnitude basis probably pretty similar to the size of the restructuring actions, that $50 million

  80% confidence

• Given key economic indicators remain largely consistent with 2025 levels, not planning for any macroeconomic tailwinds in the near term

  80% confidence

• High-value categories expected to grow at mid-single-digit plus

  80% confidence

• Compliance enforcement in general retail expected to provide a tailwind

  80% confidence

• I do not anticipate an increase in customer acquisition costs and feel confident in the company's paper supply risk management

  80% confidence

• High-value categories provided necessary offset to base solutions, which continue to be impacted by tariff-related uncertainty

  80% confidence

• Does not anticipate an increase in customer acquisition costs

  80% confidence