10.24.14
Avery Dennison announced preliminary, unaudited results for its third quarter ended Sept. 27, 2014.
“Third quarter EPS was in line with our expectations, despite a modest decline in sales in Retail Branding and Information Solutions, and higher-than-expected transition costs associated with the consolidation of Pressure-sensitive Materials operations in Europe,” said Dean A. Scarborough, Avery Dennison chairman, president and CEO.
“We expect to deliver improved operational performance in the fourth quarter, with a reduction in the transition costs impacting PSM,” said Scarborough. “However, given recent top-line trends and headwinds from currency, we have modestly lowered our guidance for full-year adjusted earnings per share growth to approximately 13%. Meanwhile, we continue to execute our disciplined capital allocation strategy, reflected in the increased level of share repurchase during the past quarter.”
Pressure-sensitive Materials (PSM) segment sales increased approximately 5%. Within the segment, Label and Packaging Materials sales increased mid-single digits. Combined sales for Graphics, Reflective, and Performance Tapes also increased mid-single digits. Operating margin declined 10 basis points to 10.1% as the net impact of raw material input costs and pricing, transition costs in Europe, and country and product mix roughly offset the benefit of higher volume and productivity.
Retail Branding and Information Solutions (RBIS) segment sales were down approximately 2%, reflecting softer demand from U.S.-based apparel retailers and brands. Operating margin improved 220 basis points to 5.4% as the benefit of productivity, lower restructuring costs, and lower incentive compensation more than offset the impact of wage inflation and lower volume. Adjusted operating margin improved 80 basis points.
The company repurchased 5 million shares in the first three quarters of 2014 at an aggregate cost of $247 million. On July 1, 2013, the company completed the sale of its OCP and DES businesses.
The company expects 2014 earnings per share from continuing operations of $2.60 to $2.65. Excluding an estimated $0.40 per share for restructuring costs and other items, the company expects adjusted (non-GAAP) earnings per share from continuing operations of $3.00 to $3.05.
“Third quarter EPS was in line with our expectations, despite a modest decline in sales in Retail Branding and Information Solutions, and higher-than-expected transition costs associated with the consolidation of Pressure-sensitive Materials operations in Europe,” said Dean A. Scarborough, Avery Dennison chairman, president and CEO.
“We expect to deliver improved operational performance in the fourth quarter, with a reduction in the transition costs impacting PSM,” said Scarborough. “However, given recent top-line trends and headwinds from currency, we have modestly lowered our guidance for full-year adjusted earnings per share growth to approximately 13%. Meanwhile, we continue to execute our disciplined capital allocation strategy, reflected in the increased level of share repurchase during the past quarter.”
Pressure-sensitive Materials (PSM) segment sales increased approximately 5%. Within the segment, Label and Packaging Materials sales increased mid-single digits. Combined sales for Graphics, Reflective, and Performance Tapes also increased mid-single digits. Operating margin declined 10 basis points to 10.1% as the net impact of raw material input costs and pricing, transition costs in Europe, and country and product mix roughly offset the benefit of higher volume and productivity.
Retail Branding and Information Solutions (RBIS) segment sales were down approximately 2%, reflecting softer demand from U.S.-based apparel retailers and brands. Operating margin improved 220 basis points to 5.4% as the benefit of productivity, lower restructuring costs, and lower incentive compensation more than offset the impact of wage inflation and lower volume. Adjusted operating margin improved 80 basis points.
The company repurchased 5 million shares in the first three quarters of 2014 at an aggregate cost of $247 million. On July 1, 2013, the company completed the sale of its OCP and DES businesses.
The company expects 2014 earnings per share from continuing operations of $2.60 to $2.65. Excluding an estimated $0.40 per share for restructuring costs and other items, the company expects adjusted (non-GAAP) earnings per share from continuing operations of $3.00 to $3.05.