AI Takeaway
Avery Dennison delivered solid Q1 2026 results with revenue up 7.0% YoY to $2.30B and EPS of $2.18, while operating cash flow surged dramatically to $136.5M from -$16.3M a year ago, signaling improved working capital management.
Revenue
$2.3B
++6.99% YoY
EPS (Basic)
$2.19
++4.29% YoY
Gross Margin
28.9%
-0.01% YoY
Filed · Source: SEC EDGAR 10-Q filing
Total revenue grew 7.0% YoY to $2.30B in Q1 2026 (vs. $2.15B in Q1 2025), reflecting broad-based demand strength across Avery Dennison's labeling and packaging materials segments.
Source: Source: 10-Q Income Statement, Q1 2026
Gross profit increased 7.0% YoY to $664.8M, though gross margin remained essentially flat at 28.92% (vs. 28.93% prior year), indicating that revenue gains were offset by proportionally similar cost increases.
Source: Source: 10-Q Income Statement, Q1 2026
SG&A expenses rose 8.1% YoY to $375.1M, outpacing revenue growth of 7.0%, which likely weighed on operating income expansion and reflects ongoing investment in sales infrastructure and administrative costs.
Source: Source: 10-Q Income Statement, Q1 2026
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Upgrade to unlockSG&A expenses grew 8.1% YoY versus revenue growth of 7.0%, creating margin compression risk at the operating level. If this trend persists, it could erode net income growth despite top-line momentum. Net income grew only 1.1% YoY despite 7.0% revenue growth, suggesting cost pressures are already impacting profitability.
Source: Source: 10-Q Income Statement, Q1 2026
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Upgrade to unlockReported EPS of $2.47 versus the $2.45 analyst consensus — a +0.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $2.3B | $2.15B | +6.99% |
Cost of Revenue | $1.63B | $1.53B | +7.00% |
Gross Profit | $664.8M | $621.5M | +6.97% |
Net Income | $168.1M | $166.3M | +1.08% |
EPS (Basic) | $2.19 | $2.10 | +4.29% |
EPS (Diluted) | $2.18 | $2.09 | +4.31% |
SG&A Expense | $375.1M | $347M | +8.10% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $8.98B | $8.35B | +7.47% |
Current Assets | $3.22B | $3.03B | +6.24% |
Current Liabilities | $2.8B | $2.95B | -5.18% |
Stockholders' Equity | $2.3B | $2.17B | +5.99% |
Cash & Equivalents | $255.1M | $195.9M | +30.22% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $136.5M | $-16.3M | +937.42% |
Investing Cash Flow | $-32.6M | $-33.2M | +1.81% |
Financing Cash Flow | $-50.6M | $-84.9M | +40.40% |
Share Buybacks | $60.6M | $261.6M | -76.83% |
D&A | $86.8M | $77.9M | +11.42% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 28.9% | 28.9% | -0.01% |
Net Margin | 7.3% | — | — |
ROE | 7.3% | — | — |
ROA | 1.9% | — | — |
Current Ratio | $1.15 | — | — |
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Avery Dennison reported Q1 2026 revenue of $2.30B, up 7.0% YoY, with diluted EPS of $2.18, up 4.3% from $2.09 a year ago. Net income grew modestly by 1.1% to $168.1M, while operating cash flow surged dramatically to $136.5M from -$16.3M in Q1 2025.
The headline takeaways from AVY's Q1 2026 report are strong revenue growth of 7.0% to $2.30B, a dramatic recovery in operating cash flow to $136.5M, and stable gross margins near 28.9%. However, SG&A expenses grew faster than revenue at 8.1%, and net income growth lagged at just 1.1%, suggesting cost pressures are limiting bottom-line expansion.
Yes, Avery Dennison grew revenue by 7.0% YoY to $2.30B in Q1 2026, compared to $2.15B in Q1 2025. This growth was reflected across both gross profit and cost of revenue, which also rose 7.0%, keeping gross margin essentially flat at approximately 28.9%.
Avery Dennison's near-term liquidity improved in Q1 2026, with a current ratio of 1.15 and cash of $255.1M (up 30.2% YoY). However, the company carries a large implied debt load with total liabilities of approximately $6.68B against equity of $2.30B, and ROA of only 1.87% reflects the capital-intensive nature of its business.
Avery Dennison's operating cash flow swung from -$16.3M in Q1 2025 to +$136.5M in Q1 2026, a 937.4% improvement. While the filing text is not available to confirm the exact drivers, this type of swing typically reflects improved working capital management, such as faster receivables collection or better inventory control, rather than purely earnings-driven improvement.