Avery Dennison’s second quarter results were well received, with management highlighting the impact of customer inventory stocking in its Materials Group and the continued strength of its high-value product categories. CEO Deon Stander emphasized that organic sales growth was supported by both base and specialty labels, as well as Intelligent Labels, with customer pre-buys—especially in Europe and Asia—providing a temporary tailwind. Stander noted, “Our performance this quarter once again demonstrated the strength and resilience of our portfolio,” citing balanced growth and operational execution. Adjusted EBITDA margins expanded across both business segments, helped by productivity initiatives and pricing actions to offset inflation.
Is now the time to buy AVY? Find out in our full research report (it’s free for active Edge members).
Avery Dennison (AVY) Q2 CY2026 Highlights:
- Revenue: $2.46 billion vs analyst estimates of $2.30 billion (10.9% year-on-year growth, 7.3% beat)
- Adjusted EPS: $2.89 vs analyst estimates of $2.47 (17% beat)
- Adjusted EBITDA: $421 million vs analyst estimates of $375.9 million (17.1% margin, 12% beat)
- Adjusted EPS guidance for the full year is $10.15 at the midpoint, beating analyst estimates by 1.3%
- Operating Margin: 12.7%, in line with the same quarter last year
- Organic Revenue rose 7.6% year on year (beat)
- Market Capitalization: $13.31 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Avery Dennison’s Q2 Earnings Call
- Ghansham Panjabi (Baird) asked for more detail on Intelligent Labels growth across end markets. CEO Deon Stander outlined that apparel and general retail would see continued growth, logistics would face ongoing headwinds, and food would contribute more meaningfully in the second half.
- George Staphos (Bank of America) probed the magnitude and timing of the pre-buy effect. CFO Gregory Lovins clarified that around 2.5% of first-half growth was due to customer stocking, mainly in Europe and Asia, and that most of this would reverse in Q3.
- John McNulty (BMO Capital Markets) inquired about price/cost dynamics and Solutions Group margins. Lovins responded that productivity and price increases were largely offsetting inflation, with Solutions Group margins benefiting from volume rebound and efficiency gains.
- Jeff Zekauskas (JPMorgan) questioned the breadth of Intelligent Labels in food and the impact of employee costs. Stander explained that bakery and protein were initial focus areas in food, while Lovins stated that productivity gains were offsetting wage and incentive compensation.
- Matt Roberts (Raymond James) asked about the status and contribution of food retail pilots. Stander confirmed ongoing rollouts at major U.S. grocers, with commercial deployments set to ramp in the second half and broader benefits expected in future years.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace and impact of customer destocking in Materials Group, (2) the acceleration of Intelligent Labels rollouts, especially in food retail and apparel, and (3) the company’s ability to manage inflation-driven cost pressures through pricing and productivity gains. Execution on large-scale customer pilots and margin preservation will be key performance indicators.
Avery Dennison currently trades at $175.34, up from $167.14 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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