Gross margin expansion
Gross margin improved to 29.62% from 28.78% a year ago, driven by favorable price/cost dynamics and productivity gains.
Source: 10-Q Income Statement (XBRL)
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
In Q2 FY2026, Avery Dennison’s revenue grew at a double-digit pace, propelled by a 15.9% surge in the Materials Group, which offset flat performance in Solutions Group. Gross margin expanded as favorable price/cost and productivity more than compensated for inflationary pressures. However, net income growth was limited by higher restructuring charges and SG&A costs. Cash flow from operations more than doubled year-to-date, reflecting improved working capital. The uneven segment recovery and ongoing geopolitical uncertainties remain key tensions.
Revenue
$2.46B
+10.92% YoY
EPS (Diluted)
$2.67
+10.79% YoY
Gross Margin
29.6%
+0.8 pts YoY
Source: SEC XBRL
Avery Dennison (AVY) reported Q2 FY2026 revenue of $2.46B, up 10.9% year over year. AVY's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 2.89 | 2.49 | Beat +15.9% |
| Mar 2026 | 2.47 | 2.45 | Beat +0.8% |
| Dec 2025 | 2.45 | 2.42 | Beat +1.1% |
| Sep 2025 | 2.37 | 2.42 | Miss -2.2% |
Adjusted (non-GAAP) EPS of $2.89 versus the $2.49 analyst consensus — a +15.9% beat for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $2.67.
2 reported segments · SEC XBRL
Segment revenue totals $2.46B, which is the $2.46B of consolidated revenue on the income statement.
Compiled by AI from this SEC filing
Gross margin improved to 29.62% from 28.78% a year ago, driven by favorable price/cost dynamics and productivity gains.
Source: 10-Q Income Statement (XBRL)
The company recorded $18.6 million in restructuring charges, up from $8.0 million, primarily related to headcount reductions and asset impairments.
Source: 10-Q Note 4 Cost Reduction Actions
Year-to-date operating cash flow surged 183% to $544.7 million, driven by better working capital management.
Source: 10-Q Cash Flow Statement (XBRL)
Avery Dennison completed a ~$75 million minority investment in Wiliot Ltd. to expand sensor technology and solutions for supply chains.
Source: 10-Q Note 10 Venture Investments
The effective tax rate for Q2 rose to 27.8% from 26.0% a year earlier, primarily due to discrete tax charges.
Source: 10-Q Note 6 Taxes Based on Income
Compiled by AI from 10-Q Item 1A of this filing · 2 high, 3 medium, 0 low
Evolving U.S. trade policies, including new tariffs on imports and retaliatory measures, have directly impacted Avery Dennison’s apparel sales, causing a low single-digit rate decrease in those categories in recent quarters. Ongoing trade negotiations and potential additional tariffs could further disrupt supply chains and demand.
Source: 10-Q Item 1A Risk Factors
Conflicts such as the Russia-Ukraine war and instability in the Middle East have disrupted operations, with sales in Russia halted and sales in Israel and the broader region underperforming. These conditions could escalate, affecting global demand and supply chains.
Source: 10-Q Item 1A Risk Factors
Slower growth in key regions, inflation, and reduced consumer spending pose risks to demand for Avery Dennison’s products. Macroeconomic weakness could lead to lower volumes across its end markets.
Source: 10-Q Item 1A Risk Factors
With approximately 69% of net sales originating outside the U.S., fluctuations in foreign exchange rates can significantly affect reported revenue and earnings. The company uses hedging instruments but remains exposed to currency volatility.
Source: 10-Q Item 1A Risk Factors
Inflationary pressures on raw materials, energy, and freight could compress margins if the company is unable to pass costs onto customers or realize productivity savings. The risk is heightened in a competitive pricing environment.
Source: 10-Q Item 1A Risk Factors
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 2.46 $B | 2.22 $B | +10.92% |
Cost of Revenue $B | 1.73 $B | 1.58 $B | +9.62% |
Gross Profit $M | 729.40 $M | 639.10 $M | +14.13% |
Net Income $M | 204.10 $M | 189.00 $M | +7.99% |
EPS (Basic) $ | 2.67 $ | 2.42 $ | +10.33% |
EPS (Diluted) $ | 2.67 $ | 2.41 $ | +10.79% |
SG&A Expense $M | 394.80 $M | 352.40 $M | +12.03% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
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.
Avery Dennison (AVY) delivered modest FY2025 revenue growth of +1.1% to $8.86B, but net income slipped -2.4% to $688M amid rising long-term debt and a significant ramp-up in share buybacks.
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