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

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• 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

• The company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025

  80% confidence

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

  80% confidence

• Restructuring benefits expected to be somewhat balanced across the year

  80% confidence

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

  80% confidence

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

  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

• Company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025, demonstrating the durability of the franchise and ability to activate multiple levers across a range of macro scenarios

  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

• Expect restructuring savings of approximately $50 million as the company continues to execute productivity playbook, and expect normalization of majority of 2025 temporary savings related to lower incentive compensation costs

  80% confidence

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

  80% confidence

• Intelligent Labels growth rate in 2026 anticipated to be above what was delivered in 2025

  80% confidence

• Expects compliance enforcement in general retail to provide a tailwind and mentioned expanded logistics pilots with new customers

  80% confidence

• Pricing typically follows raw material input cost changes, with productivity actions aimed at offsetting wage inflation

  80% confidence

• Compliance enforcement in general retail is expected to provide a tailwind, and the company is expanding logistics pilots with new customers

  80% confidence

• Base volumes were a bit soft in the quarter

  80% confidence

• The company does not anticipate an increase in customer acquisition costs and feels confident in paper supply risk management

  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

• The company delivered adjusted EPS of $9.53 and $707 million of adjusted free cash flow for 2025, demonstrating the durability of the franchise and ability to activate multiple levers across a range of macro scenarios

  80% confidence

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

  80% confidence

• Does not anticipate an increase in customer acquisition costs and feels confident in the company's paper supply risk management

  80% confidence

• Base categories were down low single digits in Q4, lower than expected, on softer customer volumes

  80% confidence

• Restructuring benefits are expected to be somewhat balanced across the year

  80% confidence