Avery Dennison Shares Gain On Strong Q2 Results, Raised FY21 Guidance

Avery Dennison Corp AVY reported second-quarter FY21 sales growth of 37.5% year-on-year, to $2.10 billion, beating the analyst consensus of $1.88 billion. Revenue was up 28% organically Y/Y and up 11% compared to 2019.
Reported sales for the Label and Graphic Materials segment increased 25% to $1.4 billion; Retail Branding and Information Solutions surged 80% to $529 million; Industrial and Healthcare Materials rose 49% to $197 million.
Gross profit rose 50.5% Y/Y to $576.3 million.
Marketing, general and administrative expenses rose 40% Y/Y to $307 million.
It reported an operating margin of 12.8%, with operating income growing 119% to $269.9 million.
The company held $344.8 million in cash and equivalents as of July 3, 2021.
Net cash provided by operating activities for the six months ended July 3, 2021, rose 159% to $476.8 million.
Adjusted EPS of $2.25 beat the analyst consensus of $2.05.
"Our strong performance comes at a time when supply chains remain tight, inflation persists and the global health crisis continues," said CEO Mitch Butier.
It also announced an agreement to acquire privately-held Vestcom for $1.45 billion.
Outlook: Avery raised the FY21 adjusted EPS outlook to $8.65 - $8.95 from the prior view of $8.40 - $8.80, versus the consensus of $8.69.
It also raised the outlook for reported EPS to $8.50 - $8.80 from previously guided $8.25 - $8.65.
Price action: AVY shares are trading higher by 3.20% at $211.62 on the last check Wednesday.

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