By Rob Curran
Avery Dennison, a leading manufacturer of tags, labels, and specialty materials, has announced a significant decline in net income for the third quarter. The company’s sales have decreased and it is still recovering from the effects of customer inventory adjustments.
In the quarter ended September, Avery Dennison reported earnings of $138.3 million, or $1.71 per share. This is a sharp drop from the previous year’s earnings of $221.5 million, or $2.70 per share.
After excluding certain items, the company’s earnings came in at $2.10 per share, meeting the average Wall Street target according to FactSet.
Third-quarter sales declined by 9.4% to $2.1 billion, which fell short of the Wall Street estimate of $2.17 billion as reported by FactSet. The materials unit experienced a 14% decrease in sales, amounting to $1.5 billion. However, sales at the solutions unit saw a 3% increase, reaching $642 million.
During the quarter, Avery Dennison made a strategic acquisition by purchasing Silver Crystal Group, a sports-apparel customization company.
According to President and CEO Deon Stander, there has been an improvement in volume for both Label Materials and Apparel Solutions. The company has seen a recovery from slow market conditions and inventory destocking. Additionally, their Intelligent Labels platform has gained traction in new categories.
