Avery Dennison Corp has recently released its 10-K report, providing a comprehensive view of the company's financial performance and operations. Avery Dennison Corporation operates as a materials science and digital identification solutions company, offering a wide range of products including pressure-sensitive label materials, performance tapes, graphics and reflective products, branding solutions, and information solutions. The company serves various industries such as home and personal care, apparel, retail, e-commerce, logistics, food and grocery, pharmaceuticals, and automotive.
In the 10-K report, under Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, the company provides an overview of its financial condition and results of operations. It includes an analysis of results of operations, financial condition, critical accounting estimates, recent accounting requirements, and non-GAAP financial measures. The company reports its financial results in conformity with accounting principles generally accepted in the United States of America (GAAP) and also communicates using certain non-GAAP financial measures. These non-GAAP financial measures are intended to supplement the presentation of financial results prepared in accordance with GAAP.
In the 10-K report, the company details its financial performance for the fiscal year. In 2025, the reported net sales change was 1%, compared to a 5% increase in 2024. The net income decreased from approximately $705 million in 2024 to approximately $688 million in 2025. The primary factors affecting this decrease included the net impact of raw material deflation-related price reductions, higher employee-related costs, higher interest expense, and growth investments. These were partially offset by benefits from productivity initiatives and higher volume/mix.
The report also discusses the company's cost reduction actions, business acquisitions, and updates on accounting guidance. In 2025, the company recorded $48.8 million in restructuring charges related to its 2025 actions, consisting of severance and related costs for the reduction of approximately 1,200 positions, as well as asset impairment charges. The report also highlights the completion of the business acquisition of W.F. Taylor Holdings, Inc. in 2025, expanding the high-value category portfolio in the Materials Group reportable segment.
Furthermore, the report provides an analysis of the company's cash flow. In 2025, net cash provided by operating activities decreased compared to 2024 primarily due to higher incentive compensation payments, higher tax payments, lower net income, and higher trade rebate payments. However, adjusted free cash flow increased compared to 2024 primarily due to lower purchases of property, plant and equipment and higher proceeds from sales of property, plant and equipment.
The report concludes with an outlook for the company's future performance, outlining certain factors that are expected to contribute to the 2026 results. These include anticipated impacts from foreign currency translation, higher interest expense, effective tax rate, incremental savings from restructuring actions, and the normalization of temporary cost savings from the previous year.
Today the company's shares have moved -0.23% to a price of $188.65. Check out the company's full 10-K submission here.
