Avery Dennison Set to Report Q2 Earnings: Here's What to Expect

Avery Dennison (AVY) is scheduled to report Q2 2025 results on July 22, with consensus estimates forecasting slight year-over-year declines in revenue to $2.23 billion (-0.2%) and EPS to $2.38 (-1.6%), reflecting recent downward revisions. Despite anticipated volume improvements and growth in Intelligent Labels, higher input costs and currency headwinds are expected to pressure margins, leading the Zacks model to not conclusively predict an earnings beat. This comes as AVY shares have significantly underperformed, dropping 19% over the past year.

Analysis

Avery Dennison (AVY) is approaching its Q2 2025 earnings report with a cautious outlook, as consensus estimates project slight year-over-year declines in both revenue to $2.23 billion (-0.2%) and EPS to $2.38 (-1.6%). These estimates have been revised downward over the past 60 days, reflecting anticipated headwinds from higher raw material, labor, and freight costs, as well as negative currency translation effects. While the company is expected to benefit from improved volumes, normalized growth in apparel, and increased adoption of Intelligent Labels, these positives may not be sufficient to offset margin pressure. The Zacks model, which has a historically decent track record, does not predict an earnings beat, underscored by a negative Earnings ESP of -0.42%. Segment-level models reinforce this view, predicting modest revenue and operating profit declines for both the Materials Group and the Solutions Group. This fundamental weakness is mirrored in the stock's performance, which has fallen 19% over the past year, significantly underperforming the broader industry's 5% decline.

Key Decisions for Investors

• Given the downward estimate revisions, persistent cost pressures, and a quantitative model not predicting a beat, investors should exercise caution ahead of the July 22 earnings release.
• Monitor the reported operating margins closely to assess whether the company's productivity and cost-saving initiatives were successful in offsetting the well-telegraphed inflation and currency headwinds.
• For those seeking exposure in the industrial sector with more favorable short-term setups, consider evaluating the mentioned peers like EMR, ITW, and CCK, which possess positive Earnings ESPs and stronger near-term outlooks according to the provided model.