Latest news with #KumKleenProducts
Yahoo
23-04-2025
- Business
- Yahoo
Avery Dennison (NYSE:AVY) Posts Q1 Sales In Line With Estimates
Adhesive manufacturing company Avery Dennison (NYSE:AVY) met Wall Street's revenue expectations in Q1 CY2025, but sales were flat year on year at $2.15 billion. Its GAAP profit of $2.09 per share was 10.5% below analysts' consensus estimates. Is now the time to buy Avery Dennison? Find out in our full research report. Revenue: $2.15 billion vs analyst estimates of $2.16 billion (flat year on year, in line) EPS (GAAP): $2.09 vs analyst expectations of $2.34 (10.5% miss) Adjusted EBITDA: $352.4 million vs analyst estimates of $353.4 million (16.4% margin, in line) Operating Margin: 11.9%, in line with the same quarter last year Free Cash Flow was -$59.9 million, down from $64.1 million in the same quarter last year Organic Revenue rose 2.3% year on year, in line with the same quarter last year Market Capitalization: $13.81 billion 'We delivered a strong first quarter, in-line with expectations,' said Deon Stander, president and CEO. Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries. Industrial packaging companies have built competitive advantages from economies of scale that lead to advantaged purchasing and capital investments that are difficult and expensive to replicate. Recently, eco-friendly packaging and conservation are driving customers preferences and innovation. For example, plastic is not as desirable a material as it once was. Despite being integral to consumer goods ranging from beer to toothpaste to laundry detergent, these companies are still at the whim of the macro, especially consumer health and consumer willingness to spend. A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Avery Dennison's sales grew at a sluggish 4.4% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Avery Dennison's recent performance shows its demand has slowed as its revenue was flat over the last two years. We can dig further into the company's sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don't accurately reflect its fundamentals. Over the last two years, Avery Dennison's organic revenue was flat. Because this number aligns with its normal revenue growth, we can see the company's core operations (not acquisitions and divestitures) drove most of its results. This quarter, Avery Dennison's $2.15 billion of revenue was flat year on year and in line with Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 2.7% over the next 12 months. While this projection implies its newer products and services will fuel better top-line performance, it is still below the sector average. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development. Avery Dennison has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.5%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it's a show of well-managed operations if they're high when gross margins are low. Analyzing the trend in its profitability, Avery Dennison's operating margin might fluctuated slightly but has generally stayed the same over the last five years. We like to see margin expansion, but we're still happy with Avery Dennison's performance considering most Industrial Packaging companies saw their margins plummet. This quarter, Avery Dennison generated an operating profit margin of 11.9%, in line with the same quarter last year. This indicates the company's cost structure has recently been stable. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Avery Dennison's unimpressive 4.7% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. Although it wasn't great, Avery Dennison's two-year annual EPS growth of 2.2% topped its flat revenue. In Q1, Avery Dennison reported EPS at $2.09, down from $2.13 in the same quarter last year. This print missed analysts' estimates. Over the next 12 months, Wall Street expects Avery Dennison's full-year EPS of $8.69 to grow 15.9%. This was an in line quarter, with revenue and EBITDA meeting expectations. Operating margin was unchanged compared to the same quarter last year. The stock remained flat at $174.50 immediately following the results. The latest quarter from Avery Dennison's wasn't that good. One earnings report doesn't define a company's quality, though, so let's explore whether the stock is a buy at the current price. When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
11-04-2025
- Business
- Yahoo
Avery Dennison (AVY): Buy, Sell, or Hold Post Q4 Earnings?
What a brutal six months it's been for Avery Dennison. The stock has dropped 24.1% and now trades at $165.51, rattling many shareholders. This was partly due to its softer quarterly results and might have investors contemplating their next move. Is now the time to buy Avery Dennison, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free. Even with the cheaper entry price, we're swiping left on Avery Dennison for now. Here are three reasons why you should be careful with AVY and a stock we'd rather own. Founded as Kum Kleen Products, Avery Dennison (NYSE:AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries. Investors interested in Industrial Packaging companies should track organic revenue in addition to reported revenue. This metric gives visibility into Avery Dennison's core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, Avery Dennison's organic revenue averaged 1.5% year-on-year declines. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Avery Dennison might have to lean into acquisitions to grow, which isn't ideal because M&A can be expensive and risky (integrations often disrupt focus). Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions. Avery Dennison's EPS grew at an unimpressive 7.4% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 4.4% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded. ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Over the last few years, Avery Dennison's ROIC has unfortunately decreased. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities. We see the value of companies helping their customers, but in the case of Avery Dennison, we're out. Following the recent decline, the stock trades at 15.7× forward price-to-earnings (or $165.51 per share). This valuation tells us it's a bit of a market darling with a lot of good news priced in - we think there are better opportunities elsewhere. We'd suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
