NYSE:AVY
Avery Dennison Corp
A global converting materials leader offering labels, tapes, and films that drive efficiency and sustainability across multiple industrial sectors.
Key Metrics
Investment Thesis
Bull Case
Investors may favor AVY for its diversified global footprint providing stable cash flows and a history of consistent shareholder returns through dividends and buybacks. The company's transition toward sustainable materials positions it well for long-term growth as regulatory pressures increase demand for eco-friendly packaging solutions. Strong free cash flow generation supports continued capital allocation without relying heavily on external financing.
Bear Case
The stock faces headwinds from recent revenue contraction trends starting in 2023 and a dip in net income to $503.0M that year, indicating sensitivity to macroeconomic conditions. High levels of accumulated other comprehensive losses and significant non-cash adjustments suggest underlying earnings quality concerns that warrant scrutiny. Elevated debt relative to equity and heavy reliance on capital expenditures could limit agility during economic downturns.
About Avery Dennison Corp
Avery Dennison Corporation is a global leader in converting solutions, specializing in labels, tapes, films, and packaging materials used across industries like automotive, healthcare, and retail. The company serves diverse markets including consumer packaged goods, industrial manufacturing, and transportation by providing sustainable and functional material technologies. Its revenue stream is driven by the continuous demand for secure branding, supply chain management, and protective packaging solutions worldwide.
Analysis
Management Discussion
Revenue grew slightly to $8.86B in 2025, reflecting resilience after a dip in 2023, while operating profit reached $925.1M driven by strong cash flow from operations of $881.4M. However, the company reported a net decrease in cash of $126.3M due to significant capital expenditures of $169.0M and investing activities of -$596.0M alongside substantial share repurchases of $572.3M.
Industry Overview
The global converting materials industry is highly competitive with a focus on innovation in security printing, sustainability, and smart packaging technologies. Demand remains robust across automotive, retail, and logistics sectors, though margin compression from commodity-like products poses ongoing challenges for profitability. Industry consolidation continues as companies seek scale to offset raw material cost volatility.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $9.04B | $8.36B | $8.76B | $8.86B |
| Cost of Revenue | $6.64B | $6.09B | $6.22B | $6.31B |
| Gross Profit | $2.40B | $2.28B | $2.53B | $2.55B |
| Operating Expenses | $1.40B | $1.58B | $1.58B | $1.62B |
| Operating Income | $999.3M | $694.7M | $953.5M | $925.1M |
| R&D | $136.1M | $135.8M | $137.8M | $136.6M |
| G&A | $1.33B | $1.31B | $1.42B | $1.42B |
| Stock-Based Comp | $47.4M | $22.3M | $28.7M | $27.9M |
| D&A | $290.7M | $298.4M | $312.2M | $328.2M |
| Depreciation | $177.4M | $187.4M | $197.1M | $206.4M |
| Amortization | $81.8M | $86.3M | $89.4M | $92.8M |
| Other OpEx | $-62.0M | $133.3M | $24.1M | $62.1M |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Interest Expense | $84.1M | $119.0M | — | — |
| Pre-Tax Income | $999.3M | $694.7M | $953.5M | $925.1M |
| Income Tax | $242.2M | $191.7M | $248.6M | $237.1M |
| Continuing Ops | $999.3M | $694.7M | $953.5M | $925.1M |
| Discontinued Ops | $-242.2M | $-191.7M | $-248.6M | $-237.1M |
| Net Income | $757.1M | $503.0M | $704.9M | $688.0M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $757.1M | $503.0M | $704.9M | $688.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.78B | $2.80B | $3.08B | $2.99B |
| Cash & Equivalents | $167.2M | $215.0M | $329.1M | $202.8M |
| Accounts Receivable | $1.37B | $1.41B | $1.47B | $1.50B |
| Inventory | $1.01B | $920.7M | $978.1M | $975.8M |
| Other Current Assets | $230.5M | $245.4M | $305.3M | $307.8M |
| Long-Term Assets | $5.17B | $5.41B | $5.33B | $5.81B |
| PP&E (Net) | $1.54B | — | — | — |
| Intangibles | $840.3M | $849.1M | $755.3M | $827.5M |
| Goodwill | $1.86B | $2.01B | $1.98B | $2.27B |
| Operating Leases | $161.7M | $200.2M | $227.5M | $215.8M |
| Other LT Assets | $763.9M | $2.35B | $2.37B | $2.50B |
| Total Assets | $7.95B | $8.21B | $8.40B | $8.80B |
| Current Liabilities | $2.80B | $2.70B | $2.86B | $2.65B |
| Accounts Payable | $1.34B | $1.28B | $1.34B | $1.26B |
| Current Leases | $42.4M | $45.4M | $49.6M | $53.1M |
| Deferred Revenue | $22.2M | $18.1M | $15.5M | $16.2M |
| Taxes Payable | $76.2M | $57.6M | $74.7M | $86.1M |
| Other Current Liab | $1.32B | $1.30B | $1.38B | $1.24B |
| Long-Term Liabilities | $3.12B | $3.38B | $3.23B | $3.91B |
| LT Operating Leases | $113.6M | $152.3M | $176.1M | $167.6M |
| Other LT Liab | $3.00B | $3.23B | $3.05B | $3.74B |
| Total Liabilities | $5.92B | $6.08B | $6.09B | $6.56B |
| Shareholders' Equity | $2.03B | $2.13B | $2.31B | $2.24B |
| Retained Earnings | $4.41B | $4.69B | $5.15B | $5.60B |
| AOCI | $-364.0M | $-408.1M | $-456.1M | $-409.7M |
| Total L&E | $7.95B | $8.21B | $8.40B | $8.80B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $757.1M | $503.0M | $704.9M | $688.0M |
| Non-Cash Adjustments | $135.1M | $648.7M | $-55.0M | $638.2M |
| Working Capital Changes | $68.8M | $-325.7M | $288.9M | $-444.8M |
| Cash from Operations | $961.0M | $826.0M | $938.8M | $881.4M |
| Capital Expenditures | $278.1M | $265.3M | $208.8M | $169.0M |
| Cash from Investing | $-332.7M | $-459.0M | $-243.1M | $-596.0M |
| Share Buybacks | $379.5M | $137.5M | $247.5M | $572.3M |
| Dividends Paid | $238.9M | $256.7M | $277.5M | $288.4M |
| Cash from Financing | $-615.2M | $-317.2M | $-576.1M | $-414.9M |
| FX Effect | $-8.6M | $-2.0M | $-5.5M | $3.2M |
| Net Change in Cash | $4.5M | $47.8M | $114.1M | $-126.3M |
| Beginning Cash | $162.7M | $167.2M | $215.0M | $329.1M |
| Ending Cash | $167.2M | $215.0M | $329.1M | $202.8M |
Frequently Asked Questions
How does Avery Dennison Corp make money?
The company's revenue is primarily generated through its Performance Materials segment which includes security features and functional films, the Consumer Packaging segment focused on labels for retail and industrial use, and the Industrial Packaging segment providing tapes and protective materials for logistics and transportation needs.
What are the main risks for AVY?
Currency exchange rate fluctuations impacting international earnings given the company's global operations, potential supply chain disruptions affecting raw material availability, shifting consumer demand away from traditional packaging formats, and competitive pressure on pricing in low-margin commodity segments.
What is AVY's competitive advantage?
Avery Dennison leverages its extensive global distribution network to ensure rapid delivery of custom solutions, utilizes proprietary technology for advanced security features in labeling that are difficult to counterfeit, and maintains a strong commitment to sustainability through recyclable and bio-based material innovations.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.