Avery Dennison's Strong 2024 Performance Sets Stage for 2025 Growth

Avery Dennison Corporation (NYSE: AVY) has announced its fourth quarter and full year 2024 results, showcasing strong earnings growth and a robust balance sheet. The company's performance in 2024 sets the stage for continued growth and value creation in 2025. Let's dive into the key highlights and what they mean for investors.



Strong Earnings Growth in 2024

Avery Dennison reported full year 2024 earnings per share (EPS) of $9.43, up 19% year-over-year (YoY). The company's adjusted EPS, which excludes certain items, came in at $9.80, up 20% YoY. This strong earnings growth was driven by both the Materials and Solutions Groups, which delivered robust top-line and bottom-line results.

Accelerating Growth in High-Value Categories

A key driver of Avery Dennison's earnings growth was the acceleration in its high-value categories, which now account for almost half of its portfolio. The company's Intelligent Labels business, in particular, delivered another year of strong growth, with adoption of its solutions in new categories like Food increasing significantly. This growth is expected to continue in 2025, as the value of Avery Dennison's technology in addressing key industry challenges resonates with customers.

Disciplined Capital Allocation and Balance Sheet Strength

Avery Dennison's disciplined capital allocation strategy has enabled it to maintain a strong balance sheet while returning cash to shareholders. In 2024, the company returned $525 million in cash to shareholders through a combination of dividends and share repurchases, repurchasing 1.2 million shares at an aggregate cost of $248 million. Net of dilution from long-term incentive awards, the company's share count was down 0.9 million compared to the same time last year. This reduction in share count contributed to Avery Dennison's EPS growth in 2024 and is expected to continue driving growth in 2025.

Guidance for 2025

Based on the factors listed in its supplemental presentation materials and other assumptions, Avery Dennison has provided guidance for 2025. The company expects reported EPS to be in the range of $9.55 to $9.95, with adjusted EPS guidance of $9.80 to $10.20. This guidance reflects the company's confidence in its ability to meet its long-term goals for superior value creation in a range of geopolitical and macro scenarios.

Conclusion

Avery Dennison's strong 2024 performance, driven by accelerating growth in high-value categories, disciplined capital allocation, and a robust balance sheet, sets the stage for continued growth and value creation in 2025. The company's guidance for 2025 reflects its confidence in its ability to execute its strategies and meet its long-term goals. Investors should consider Avery Dennison as a strong performer in the materials science and digital identification solutions sector, with a proven track record of delivering superior value for shareholders.