Third‑Quarter Results Show Resilience Amid Cost Pressures
Avery Dennison Corp. (NYSE: AVY) announced its third‑quarter 2025 financial results on Wednesday, reporting earnings that surpassed Wall Street expectations despite a decline in absolute profit from the same period last year. The company’s ability to lift prices and curb costs has been a central theme of its recent performance, allowing it to maintain healthy margins in a challenging macro‑economic environment.
Earnings Above Forecast
The pressure‑sensitive materials and labeling specialist reported an adjusted net income of $184.8 million, translating to $2.37 per share on an adjusted basis. Analysts had projected $2.33 per share, meaning the company exceeded expectations by $0.04 per share. On a non‑GAAP basis, the earnings were $166.3 million ($2.13 per share), a decline from the previous year’s $181.7 million ($2.25 per share). While the headline figure dipped, the adjusted earnings margin remained robust, indicating that the company successfully neutralised the impact of one‑time or non‑recurring items.
Revenue Growth and Segment Performance
Total revenue for the quarter rose 1.5 % to $2.215 billion, up from $2.183 billion a year earlier. The company’s revenue stream is split between two primary segments:
| Segment | 2025 Q3 Revenue | YoY Change |
|---|---|---|
| Solutions (high‑value, intelligent labels) | $700 million | +2 % |
| Materials (core packaging) | $1.52 billion | +1.2 % |
The solutions group, which includes high‑value categories and intelligent labeling, contributed the most growth, underscoring the company’s strategic shift toward technology‑enabled products that command higher margins. The materials group, while still expanding, experienced more modest gains, reflecting the ongoing impact of inflation and tariff uncertainty on input costs.
Cost‑Cutting and Pricing Strategy
Avery Dennison’s management emphasized that the company’s ability to increase prices has been pivotal in preserving profit margins. Inflationary pressures and tariff volatility have prompted the firm to adjust its pricing strategy, particularly for its pressure‑sensitive products used in labeling, decorating, and specialty applications. The company’s cost‑management initiatives have helped offset the higher cost of raw materials, ensuring that overall profitability remains intact.
Market Position and Investor Outlook
With a market capitalization of $12.43 billion and a price‑to‑earnings ratio of 17.89, Avery Dennison is positioned as a stable player in the materials and packaging sector. The stock’s recent trajectory—closing at $163.53 on October 20—has been supported by a 52‑week high of $209.83 (November 5, 2024) and a low of $156.23 (October 13, 2025). The company’s diverse product portfolio, ranging from pressure‑sensitive films to RFID inlays, serves a broad customer base that includes retailers, apparel manufacturers, and brand owners.
Analysts note that while the company’s earnings have declined from the previous year, the adjusted figures demonstrate resilience. The continued focus on high‑margin solutions and disciplined cost control should position Avery Dennison to navigate the ongoing uncertainties in the global supply chain. Investors looking for exposure to the materials sector may view the recent earnings beat and strategic pricing initiatives as positive indicators for future performance.
This article synthesizes the most recent earnings release from Avery Dennison Corp. and contextualizes the results within the company’s broader operational strategy and market environment.
