Avery Dennison Q3 2026: Sales Rise 5.2% to $2.33bn

Avery Dennison Corporation has reported its preliminary financial results for the third quarter ended 30 September 2026, showing year-on-year top-line growth and improved cash flow. The US materials science and digital identification solutions provider posted net sales of $2.33 billion, a 5.2% increase from $2.22 billion in the same period last year. On an organic basis, sales rose 3.7%.

Reported net income reached $169.70 million, or $2.24 per diluted share, up 5.2% from $2.13 per diluted share in the third quarter of 2025. Adjusted earnings per share (EPS) grew 2.1% year on year to $2.42. President and CEO Deon Stander attributed the performance to underlying organic sales momentum and productivity measures.

Innovation and service differentiation drive growth

Stander said the company’s focus on innovation and service-led differentiation delivered mid-single-digit organic growth in both high-value categories and base businesses. He noted that teams demonstrated strong operational agility in the face of higher inflation and customer destocking impacts, delivering robust productivity and generating impressive free cash flow.

Segment performance: Materials Group leads sales expansion

The Materials Group recorded reported sales of $1.64 billion, up 8.5% year on year and 4.9% on an organic basis. Both base and high-value categories achieved mid-single-digit growth, supported by price benefits and positive volume mix. Segment adjusted EBITDA margin contracted 110 basis points to 16.4%, impacted by negative mix and increased employee-related costs.

The Solutions Group, which supplies branding, labelling and digital identification technologies to the apparel sector, posted reported net sales of $687 million, a 1.8% decline on a reported basis. Organic sales within the division grew 0.8%, led by mid-single-digit expansion across overall apparel categories. Segment profitability improved, with adjusted EBITDA margin increasing 80 basis points to 17.8% as operational efficiencies mitigated cost pressures.

Overall adjusted EBITDA reached $367.70 million, compared with $365.10 million in the third quarter of 2025. Adjusted operating income totalled $282.10 million, yielding an operating margin of 12.1%. Restructuring initiatives delivered approximately $54 million in pre-tax savings through the first nine months of the year.

Capital allocation and updated full-year outlook

During the first three quarters of 2026, Avery Dennison returned $481 million in cash to shareholders through dividends and share repurchases. The group repurchased 1.50 million shares for $257 million, reducing total diluted share count by 1.90 million shares compared with the prior-year period.

Looking ahead to the remainder of fiscal 2026, the company updated its full-year earnings expectations. Avery Dennison anticipates full-year reported EPS between $9.45 and $9.59. Adjusted EPS guidance has been established at $10.10 to $10.24, excluding an estimated $0.65 impact from restructuring charges and other items.