Abstract
Avery Dennison will report second-quarter results on July 30, 2026 Pre-Market; this preview summarizes current consensus for revenue, margin and EPS, compares the prior quarter’s actuals, and highlights segment dynamics with the balance of analyst opinions.
Market Forecast
For the current quarter, consensus points to total revenue of 2.30 billion US dollars, up 2.39% year over year, EBIT of 289.95 million US dollars, up 2.19%, and adjusted EPS of 2.47, up 3.15%; the company’s model implies stable-to-modestly improving margins with gross margin effectively flat to slightly higher and net profitability holding near recent levels. The main business is projected to be supported by steadier volumes in materials and ongoing efficiency benefits, while the most promising growth vector remains solutions tied to intelligent labeling, with improving adoption and pricing underpinning the outlook.
The most promising segment is solutions, which includes intelligent labels, with revenue of 649.20 million US dollars last quarter and accelerating adoption; the segment has been outgrowing the corporate average year over year based on consensus commentary.
Last Quarter Review
In the previous quarter, Avery Dennison reported revenue of 2.30 billion US dollars, a gross profit margin of 28.92%, GAAP net income attributable to shareholders of 168.00 million US dollars with a net profit margin of 7.31%, and adjusted EPS of 2.47, with year-over-year growth of 7.39% for EPS and 6.99% for revenue. Operating execution benefited from favorable mix and disciplined cost control.
Main business highlights: materials generated 1.65 billion US dollars and solutions delivered 649.20 million US dollars; solutions continued to gain share on broader intelligent label deployments and premium applications relative to materials.
Current Quarter Outlook
Main business: Materials
Materials remains the revenue anchor, with last quarter’s 1.65 billion US dollars reflecting normalized demand across label and graphics substrates. For this quarter, stable mid-single-digit pricing and incremental volume recovery in label materials are expected to sustain revenue near recent levels while overhead absorption and procurement savings support margins. Watch for raw material tailwinds versus the prior year to moderate; if resin and paper inputs firm, gross margin leverage could plateau, making mix management crucial to preserve the near-29.00% gross margin profile.
Most promising business: Solutions and intelligent labeling
Solutions, which houses intelligent labels and higher value applications, continues to outgrow the core. Last quarter’s 649.20 million US dollars evidences scale, and consensus expects adoption to expand across apparel, logistics, and food retail. The thesis this quarter hinges on program wins in RFID-enabled tags that enhance inventory accuracy and omnichannel fulfillment; as rollouts ramp, the business can lift group EBIT mix due to structurally higher margins. Any confirmation of new enterprise deployments or vertical expansion would be a key positive signal for both revenue visibility and profitability trajectory.
Stock-price drivers this quarter
Three variables are likely to dominate the share reaction. First, topline vs. guide: consensus centers around 2.30 billion US dollars; an outperformance coupled with commentary indicating sustained low-single to mid-single-digit growth through the back half could reset expectations. Second, margin durability: investors will parse gross margin against last quarter’s 28.92% and look for evidence that mix, productivity, and price-cost remain favorable even if input costs stabilize. Third, intelligent labels cadence: quantified order intake, conversion timelines, and vertical-specific color will shape the multiple, as investors increasingly value Avery Dennison on the growth and margin profile of solutions rather than solely the cyclical materials base.
Analyst Opinions
Across recent previews, the majority of analysts are constructive, emphasizing stable demand in materials and improving momentum in solutions, with a minority cautious on the pace of RFID adoption. Positive notes cite resilient pricing, consistent operational execution, and a balanced capital allocation approach that supports EPS growth around the mid-single digits this quarter and a path to compounding through mix shift. The bullish camp highlights that consensus revenue growth of 2.39% alongside EBIT growth of 2.19% and adjusted EPS growth of 3.15% would validate a gradual margin expansion narrative, with upside tied to intelligent label program ramps and disciplined cost controls; a beat on revenue with flat gross margin could still lift sentiment if management signals continued order strength into the holiday planning cycle.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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