07.30.15
Avery Dennison has announced preliminary, unaudited results for its second quarter, which ended on July 4, 2015.
“I’m pleased to report another solid quarter of progress against our long-term strategic and financial objectives,” says Dean Scarborough, Avery Dennison chairman and CEO. "Sales were up 4% on an organic basis, as exceptional performance in Pressure-sensitive Materials offset a decline in Retail Branding and Information Solutions. Despite the headwind from currency translation, we delivered mid-teens growth in adjusted earnings per share, continued to expand adjusted operating margin and generated significantly higher cash flow compared to last year.
“Pressure-sensitive Materials delivered great results through the consistent execution of our strategy, leveraging our scale and strengths in innovation, quality and service across the entire portfolio,” he adds. “Results in Retail Branding and Information Solutions were disappointing. Actions are underway to build a better foundation for long-term profitable growth and value creation in all segments of this business. Overall, I remain confident that the consistent execution of our strategies, including the turnaround in RBIS, will enable us to meet our long-term goals."
Overall, Avery Dennison reports an EPS of $0.68 and an adjusted EPS (non-GAAP) of $0.91. The second quarter net sales declined approximately 6% to $1.52 billion, and net sales were up approximately 4% on organic basis.
Pressure sensitive materials sales increased approximately 6%. Within the segment, sales of both label and packaging materials, and combined graphics and performance tapes, increased mid-single digits.
Operating margin improved 440 basis points to 11.7%, as the impact of lower restructuring costs, productivity initiatives, higher volume and the net benefit from price and raw material input costs more than offset higher employee-related costs. Adjusted operating margin improved 220 basis points.
As Scarborough alluded, RBIS sales were down approximately 2%. Operating margin declined 420 basis points to 2.6%, as the impact of higher restructuring charges, costs associated with a product line divestiture, lower sales and higher employee-related costs were partially offset by the benefit of productivity initiatives. Adjusted operating margin declined 40 basis points.
In addition, the company repurchased 0.5 million shares in the second quarter of 2015 at an aggregate cost of $28 million. The second quarter effective tax rate was 36%. The adjusted tax rate for the second quarter was 34%, consistent with the anticipated full year tax rate in the low to mid-thirty percent range.
“I’m pleased to report another solid quarter of progress against our long-term strategic and financial objectives,” says Dean Scarborough, Avery Dennison chairman and CEO. "Sales were up 4% on an organic basis, as exceptional performance in Pressure-sensitive Materials offset a decline in Retail Branding and Information Solutions. Despite the headwind from currency translation, we delivered mid-teens growth in adjusted earnings per share, continued to expand adjusted operating margin and generated significantly higher cash flow compared to last year.
“Pressure-sensitive Materials delivered great results through the consistent execution of our strategy, leveraging our scale and strengths in innovation, quality and service across the entire portfolio,” he adds. “Results in Retail Branding and Information Solutions were disappointing. Actions are underway to build a better foundation for long-term profitable growth and value creation in all segments of this business. Overall, I remain confident that the consistent execution of our strategies, including the turnaround in RBIS, will enable us to meet our long-term goals."
Overall, Avery Dennison reports an EPS of $0.68 and an adjusted EPS (non-GAAP) of $0.91. The second quarter net sales declined approximately 6% to $1.52 billion, and net sales were up approximately 4% on organic basis.
Pressure sensitive materials sales increased approximately 6%. Within the segment, sales of both label and packaging materials, and combined graphics and performance tapes, increased mid-single digits.
Operating margin improved 440 basis points to 11.7%, as the impact of lower restructuring costs, productivity initiatives, higher volume and the net benefit from price and raw material input costs more than offset higher employee-related costs. Adjusted operating margin improved 220 basis points.
As Scarborough alluded, RBIS sales were down approximately 2%. Operating margin declined 420 basis points to 2.6%, as the impact of higher restructuring charges, costs associated with a product line divestiture, lower sales and higher employee-related costs were partially offset by the benefit of productivity initiatives. Adjusted operating margin declined 40 basis points.
In addition, the company repurchased 0.5 million shares in the second quarter of 2015 at an aggregate cost of $28 million. The second quarter effective tax rate was 36%. The adjusted tax rate for the second quarter was 34%, consistent with the anticipated full year tax rate in the low to mid-thirty percent range.