“I’m pleased to report a solid start to 2014, with earnings in line with our expectations,” said Dean Scarborough, Avery Dennison chairman, president and CEO. “Sales were up nearly 5% on an organic basis, driven by strong volume growth in Pressure-Sensitive Materials. Retail Branding and Information Solutions delivered another quarter of strong earnings growth, reflecting the successful execution of productivity initiatives across the business.”
“We are maintaining our guidance for full-year adjusted earnings per share growth in the range of 8 to 19%, and remain committed to our disciplined strategy for capital allocation,” Scarborough added. “I am confident that the consistent execution of our strategies for long-term value creation will continue to benefit our customers, employees, and shareholders.”
Pressure-Sensitive Materials (PSM) segment sales increased approximately 6%. 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 increased 20 basis points to 9.8% as the benefit of productivity initiatives and higher volume was largely offset by higher employee-related expenses and other factors. Adjusted operating margin was unchanged.
Retail Branding and Information Solutions (RBIS) segment sales increased approximately 2%, driven by increased demand from Europe-based retailers and brands. Operating margin increased 50 basis points to 4.3% as the benefit of productivity initiatives and higher volume more than offset higher employee-related expenses and restructuring charges, as well as the impact of a prior year gain on sale of assets. Adjusted operating margin improved 120 basis points.