Avery Dennison (AVY) Q3 2026 Earnings Report

The call was predominantly positive. Avery Dennison delivered better-than-expected third-quarter results, estimated stronger underlying growth after adjusting for destocking, generated robust free cash flow, expanded Solutions Group margins, raised the full-year guidance midpoint and highlighted significant Intelligent Labels, productivity and share-gain opportunities. These positives were tempered by ongoing customer destocking, Materials Group and company-level margin pressure, logistics declines, cautious consumer demand, cost inflation and the delayed Walmart Fresh commercial ramp.

For full year 2026, Avery Dennison is narrowing adjusted EPS guidance to $10.10 to $10.24, with the new midpoint representing roughly 7% growth year-over-year; reported sales growth is expected to be approximately 5.5%, including organic sales growth of approximately 3.5%, approximately 1.5 points from currency translation, roughly 1 point from the Taylor Adhesives acquisition and approximate 40 basis point headwind from the calendar adjustment. Guidance includes incremental restructuring savings now exceeding $65 million, a net EPS benefit of approximately $0.30 from favorable currency translation and lower share count, stronger free cash flow targeting conversion of greater than 100% for the year, and capital expenditures anticipated approximately $240 million; the vast majority of the remaining balance of customer inventory destocking is expected to conclude by the end of the fourth quarter, which will also have an approximate 1.5% headwind to sales growth and modest headwind to EPS growth from the calendar shift, while Intelligent Labels food is expected to deliver robust growth next year, with a commercial ramp through '27 and double-digit growth over the next couple of years.