“We once again delivered strong financial results amidst a dynamic environment, with earnings above expectations,” said Mitch Butier, chairman and CEO of Avery Dennison Corporation. The company’s Label and Graphic Materials segment reported an 8% increase in Q2 sales to $1.5 billion.
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Avery Dennison reported a net sales increase of 11.7% to $2.3 billion in the second quarter of 2022 and has raised its guidance range for earnings per share.
“Our strong performance comes at a challenging time as supply chains remain tight, inflationary pressures are significant and COVID-19 continues,” said Butier.
“Despite these challenges and a significant currency translation headwind, we have raised our guidance for the year. The strategic foundations we have laid enable us to generate superior value creation through a balance of GDP-plus growth and top-quartile returns over the long-term.
“Once again, I want to thank our entire team for their tireless efforts to keep one another safe while continuing to deliver for our customers during this challenging period.
Second Quarter 2022 Results by Segment
Label and Graphic Materials
Reported sales increased 8% to $1.5 billion. Sales were up 14% ex. currency and 15% on an organic basis. Label and Packaging Materials sales were up high teens on an organic basis with strong growth in both high value product categories and the base business. Sales decreased by mid-single digits organically in the combined Graphics and Reflective Solutions businesses. Inflation continues to be significant in the company’s materials businesses; it anticipates more than 20% inflation in 2022 compared to prior year.
Retail Branding and Information Solutions
Reported sales increased 24% to $658 million. Sales were up 27% ex. currency and 5% on an organic basis. Growth was strong in the high value product categories, including Intelligent Labels and external embellishments. Sales decreased by low-single digits in the base business following strong prior quarter, up mid-single digits year-to-date.
Industrial and Healthcare Materials
Reported sales increased 1% to $198 million. Sales were up 5% ex. currency and 7% on an organic basis reflecting a mid-single digit increase in industrial categories and high teens increase in healthcare categories. Lower volume was principally driven by China.
During the first half of the year, the company deployed $37 million for acquisitions and returned $386 million in cash to shareholders, up $183 million compared to last year, through a combination of share repurchases and dividends.
Guidance
Based on the factors listed and other assumptions, the company has raised its guidance range for 2022 reported earnings per share from $9.35 to $9.75 to $9.60 to $9.90. Excluding an estimated $0.10 per share related to restructuring charges and other items, the company raised its guidance range for adjusted earnings per share from $9.45 to $9.85 to $9.70 to $10.00. Adjusted EPS of $9.70 to $10.00 (previously $9.45 to $9.85)
For more details, go to www.investors.averydennison.com
