Its 2Q16 net sales increased approximately 2% to $1.54 billion, with organic sales growth (non-GAAP) of approximately 4%. The company’s 2Q16 reported EPS was $0.88, with adjusted EPS (non-GAAP) of $1.09.
“We had another solid quarter, with earnings above our expectations,” said Mitch Butier, Avery Dennison president and CEO. “PSM delivered exceptional profitability, reflecting strong organic growth in the emerging markets, and productivity gains globally. Amidst challenging apparel market conditions, RBIS earnings came in as expected. The team continues to make good progress with the transformation of this business.
“We have raised our outlook for full year earnings per share, reflecting the strong operating performance in the second quarter,” said Butier. “We remain confident that the consistent execution of our strategies will enable us to continue meeting our long-term goals for superior value creation through a balance of profitable growth and capital discipline.”
Pressure-sensitive Materials (PSM) reported sales increased approximately 3%; on an organic basis, sales grew approximately 5%. Within the segment, organic sales growth was mid-single digit for Label and Packaging Materials, and low-single digit for combined Graphics and Performance Tapes.
Operating margin improved 130 basis points to 13% as the benefit of productivity initiatives and increased volume more than offset higher employee-related costs and the net impact of price and raw material input costs. Adjusted operating margin improved 120 basis points.
Retail Branding and Information Solutions (RBIS) reported sales decreased 2%; on an organic basis, sales grew approximately 2%. Operating margin increased by nearly five points to 7.5%, largely due to the benefit of lower restructuring charges. Adjusted operating margin improved 30 basis points as the net savings associated with the business model transformation and higher volume were partially offset by the impact of strategic pricing actions and higher employee-related costs.