Avery Dennison Corporation (AVY) — Q2 2026 Earnings Preview

Upcoming Earnings: Q2 2026 (period ending June 30, 2026) Last Earnings: Q1 2026 reported April 28, 2026 Prepared: July 29, 2026

1. Earnings Preview

Key Takeaway: The setup into Q2 is a low-to-moderate bar — management guided explicitly for the pre-buy unwind to weigh on volumes, and consensus has been calibrated accordingly — but the raw material inflation timing gap and the pace of the Intelligent Labels recovery are the two swing factors that could push results in either direction.

Heading into Q2 2026, the bar for AVY is deliberately set low: management guided for adjusted EPS of $2.43–$2.53 (midpoint $2.48), explicitly flagging a ~$0.10 headwind from the Q1 pre-buy unwind in label materials that largely offsets the typical $0.10–$0.15 seasonal sequential lift, and consensus at $2.47 sits just below the midpoint. Tone has shifted more cautious since Q1 — management widened scenario planning, acknowledged raw material inflation running hotter than originally planned (high single-digit sequential inflation in Q2 from petrochemical-linked commodities), and is implementing a second round of pricing actions in some regions. Estimate revisions have been essentially flat since the Q1 print (Q2 EPS consensus moved from $2.46 to $2.47, FY26 from $10.00 to $10.01), suggesting the street has largely absorbed the guidance and is not pricing in incremental upside. The stock has underperformed the S&P 500 and packaging peers since the Q1 print (AVY +0.4% vs. SPY +2.5%, PKG +12.1%, AMCR +18.9%), trading at a modest discount to historical multiples, which means the stock has not priced in a beat — but it also means there is limited cushion if the print disappoints. The key wildcard is the pace of the Intelligent Labels recovery: the logistics chip-transition headwind was expected to resolve by end of Q2, and any signal that the Walmart fresh grocery rollout is accelerating into H2 could be the catalyst that re-rates the stock, while a further delay would confirm the bear case on the platform's near-term trajectory.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus is a low bar on EPS ($2.47 vs. guidance midpoint $2.48, essentially in-line), but organic growth (0%–2% guided) is the bigger swing factor — any pre-buy unwind that runs deeper or longer than expected in label materials could push revenue below the $2.29B consensus.

Table 1 — Q2 2026 Current Quarter Snapshot (All Key KPIs)

Source: Visible Alpha Consensus and Actuals Data. Q2 2026 consensus as of July 29, 2026. Q1 2026 actuals and Q2 2025 actuals from Visible Alpha. Guidance from AVY Q1 2026 earnings call (April 28, 2026).

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs: Adj. EPS & Net Revenue)

Pattern: AVY has a strong track record of beating on EPS (6 of last 8 quarters), but revenue has been more mixed — the street has consistently overestimated top-line growth, with AVY missing revenue consensus in 5 of the last 8 quarters, reflecting persistent organic growth headwinds. Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Guidance has been unchanged since the Q1 2026 earnings call — no post-earnings 8-K or conference update has revised the Q2 or FY26 outlook — but tone has shifted more cautious on raw material inflation and management has widened its scenario planning for volume outcomes.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have been essentially flat since the Q1 print — Q2 EPS consensus moved only +$0.01 and FY26 EPS moved +$0.01 in the ~3 months since April 28 — indicating the street has fully absorbed the guidance and is not building in incremental upside. The gap between consensus and guidance midpoint is minimal on EPS, suggesting the bar is appropriately calibrated but leaves little room for error on the inflation and volume fronts.

Estimates have been remarkably stable since the Q1 print, with virtually no revision in either direction. This reflects a market that has fully priced in management's guidance but is not yet willing to build in upside from the Intelligent Labels H2 ramp or pricing recovery — creating a potential positive catalyst if the Walmart rollout commentary is constructive. Source: Visible Alpha Consensus and Actuals Data.

5. Stock Performance

Key Takeaway: AVY has significantly underperformed both the S&P 500 and packaging peers since the Q1 2026 earnings print — up only +0.4% vs. SPY +2.5%, PKG +12.1%, and AMCR +18.9% — driven by multiple compression rather than estimate cuts (estimates barely moved), suggesting the market is discounting the near-term organic growth and inflation headwinds without giving credit for the H2 Intelligent Labels ramp. The underperformance creates a lower-risk entry point if Q2 execution is clean.

AVY vs. Packaging Peers (PKG, AMCR) vs. S&P 500 (SPY) — Indexed to 100 at Q1 2026 Earnings (Apr 28, 2026). Source: Stock Price Data (Yahoo Finance).

• Sector ETF used: PKG (Packaging Corporation of America) and AMCR (Amcor plc) used as packaging/materials peers given AVY's primary peer group in Packaging & Containers. SPY used as S&P 500 proxy.
• AVY performance: $166.49 on Apr 28 → $167.14 on Jul 30 (+0.4%). The stock initially dipped post-earnings on tepid Q2 guidance, recovered modestly through June, then pulled back again in July.
• Peer divergence: PKG (+12.1%) and AMCR (+18.9%) significantly outperformed, driven by strong corrugated demand (PKG: all-time record shipments in Q2) and Amcor's synergy realization from the Berry merger. AVY's underperformance is idiosyncratic — tied to the pre-buy unwind narrative and Intelligent Labels logistics softness.
• Key event: Wiliot investment ($75M incremental) announced April 27, 2026 (day before earnings). The market's muted reaction suggests investors are taking a wait-and-see approach on BLE/condition monitoring TAM expansion.

6. Peer Commentaries — Q2 2026 Read-Through

Key Takeaway: Peer Q2 2026 commentary is a mixed read-through for AVY — packaging demand is broadly healthy and pricing actions are gaining traction across the sector, which is constructive for AVY's Materials Group; but the inflationary cost environment is intensifying (OCC, resin, freight all up sharply), and consumer demand remains bifurcated, with value-seeking behavior pressuring mid-market volumes that are relevant to AVY's apparel and general retail end markets.

Note: The following read-throughs are sourced exclusively from Q2 2026 earnings calls and post-Q1 2026 conference commentary (May–July 2026), covering the current reporting quarter. Prior-quarter results commentary has been excluded.

Packaging Corporation of America (PKG) — Q2 2026 Earnings (July 23, 2026)

Relevance to AVY: PKG is a major corrugated/containerboard producer; its commentary on packaging demand, pricing, and raw material costs provides a read-through for AVY's Materials Group label materials business and the broader industrial packaging demand environment.

• Demand very strong in Q2: PKG reported all-time record corrugated shipments in Q2 2026, with legacy business up 4.1% YoY. Management described the market environment as "tight" with capacity essentially sold out. Read-through: Constructive for AVY's Materials Group — strong packaging demand supports label materials volumes, particularly in food and consumer goods end markets.
• Pricing recovery accelerating: PKG is implementing two rounds of corrugated price increases (first rolling in July, second beginning August), with 70-75% of the first increase expected in Q3. Read-through: Supports AVY's own pricing actions in label materials — if the broader packaging industry is successfully passing through price increases, AVY's ability to recover raw material inflation through pricing is de-risked.
• Raw material inflation intensifying: OCC (recycled fiber) is up ~70% since the beginning of the year. Freight costs remain elevated. PKG noted it is "in a very high inflationary environment right now." Read-through: Confirms AVY's Q1 guidance of high single-digit sequential raw material inflation in Q2. The breadth of inflation across the packaging supply chain suggests AVY's cost headwinds are real and not idiosyncratic.
• E-commerce demand (Prime Day) boosted Q2: PKG cited Amazon Prime Day and e-commerce customers as significant drivers of strong Q2 demand. Read-through: Positive for AVY's logistics Intelligent Labels segment — strong e-commerce activity should support label demand in logistics, potentially helping offset the chip-transition headwind that weighed on Q1.
• Q3 outlook: PKG expects continued strong demand with billings up ~2% in the legacy business so far in Q3. Pre-buying is impossible given tight capacity. Read-through: Suggests the de-stocking risk in label materials (AVY's Q2 H2 concern) may be more AVY-specific than industry-wide, as broader packaging demand remains firm.

Silgan Holdings (SLGN) — Q2 2026 Earnings (July 29, 2026)

Relevance to AVY: Silgan is a rigid packaging company serving consumer goods (food, beauty, healthcare). Its commentary on consumer demand, pricing pass-through, and CPG customer behavior is relevant to AVY's Solutions Group (apparel, retail) and Materials Group (consumer goods label materials).

• CPG customers shifting focus to volume over price: SLGN noted a "much greater focus on volume right now throughout CPGs" in 2026 vs. prior years when CPGs were willing to trade price for margin. Promotional activity is being used as a tool to drive volume. Read-through: Constructive for AVY's label materials volumes — CPG customers driving volume through promotions means more SKUs, more labels, and more packaging activity. Promotional pack formats (mini cans, value packs) are particularly label-intensive.
• Mixed demand environment; Brazil weakness: SLGN described North America as a "mixed bag" with a "K-shaped economy" — high-end performing well, low-end seeing good pull-through, but the middle market was "choppy" in Q2. Brazil saw ~15% volume decline YoY due to inflation passing through to consumers. Read-through: Neutral-to-slightly-negative for AVY's emerging market label materials exposure. The K-shaped consumer dynamic is consistent with AVY's own commentary on apparel softness (mid-market) vs. food/logistics strength.
• Resin inflation: $10M unrecovered in Q2: SLGN absorbed ~$10M of net unrecovered resin inflation in Q2, describing "a tremendous amount of volatility" in resin markets. Commercial actions were implemented to recover costs. Read-through: Confirms the petrochemical-linked raw material inflation that AVY flagged in Q1. The fact that SLGN had a timing gap in recovery is consistent with AVY's warning of a slight price-cost headwind Q1→Q2.
• Pet food volumes strong (+7% YoY): Metal container pet food volumes grew 7% YoY despite tough comps. Fine fragrance also showed strong growth. Read-through: Positive for AVY's high-value label materials in food and specialty segments. Pet food is a key growth category for RFID/Intelligent Labels adoption.

Sonoco Products (SON) — Q2 2026 Earnings (July 23, 2026)

Relevance to AVY: Sonoco is a diversified packaging company with consumer and industrial segments. Its commentary on pricing recovery mechanisms, inflation, and demand is relevant to AVY's Materials Group pricing dynamics.

• "Behind the price-cost curve in Q2" but recovery mechanisms now in place: SON acknowledged being behind on price-cost recovery in Q2, but noted that contractual price increases (April URB increase, $60/ton July 8 increase) are now fully in effect for Q3. Read-through: Validates AVY's own price-cost timing gap narrative for Q2. The fact that SON expects complete pass-through in Q3 is consistent with AVY's guidance that pricing will catch up to inflation by Q3.
• OCC up $40/ton YTD to $100/ton; freight elevated: SON cited OCC up $40/ton YTD and freight as the largest cost headwind, with global inflationary pressures from the Middle East situation costing ~$10M of operating profit in Q2. Read-through: Corroborates the broad-based input cost inflation environment that AVY is navigating. The Middle East-driven energy/freight inflation is a sector-wide headwind, not AVY-specific.
• North American URB mills at 95% utilization — highest in years: SON's URB mills are running at 95% utilization with growing backlogs, requiring imports from European and Latin American mills through Q3. Read-through: Tight supply conditions in industrial paper/board markets support AVY's ability to implement and sustain price increases in label materials without losing volume to competitors.
• Consumer demand mixed; housing-related softness: SON saw a slowdown in North American adhesives/sealants (caulking cartridges) in June, which is housing-related. Aerosols slightly down on tough comps. International snack and pet food strong. Read-through: The housing-related softness is not directly relevant to AVY, but the broader consumer demand bifurcation (international strong, US mid-market soft) is consistent with AVY's apparel/general retail headwinds.

Crown Holdings (CCK) — Q2 2026 Earnings (July 21, 2026)

Relevance to AVY: Crown is a global beverage can manufacturer. Its commentary on global consumer demand, aluminum cost pass-through, and beverage market trends is relevant to AVY's label materials business in food/beverage end markets.

• Global beverage can volumes up 5% in Q2 (second consecutive quarter): CCK reported 5% global volume growth, with North America up 5%, Europe up 7%, and Asia Pacific growing. The World Cup contributed roughly half of North America's Q2 outperformance. Read-through: Strong beverage can demand is positive for AVY's label materials volumes in food/beverage. The World Cup promotional activity (360-degree can graphics, multipack promotions) is label-intensive.
• Demand remains "very firm" globally; Europe "sold out": CCK described the market as "tight" and Europe as "sold out more or less." Full-year North American shipments expected +3-4% above 2025. Read-through: Constructive for AVY's European label materials business. Tight capacity and strong demand support pricing power across the packaging supply chain.
• Inflation running ahead of cost recovery in H2; caution on consumer: CCK noted higher inflation penciled in for H2 that is "currently running ahead of cost recovery mechanisms" which reset at year-end. Management is monitoring how consumers will cope with "ongoing inflation and other higher costs." Read-through: Confirms the sector-wide inflation challenge. CCK's caution on H2 consumer absorption is a mild negative read-through for AVY's consumer-facing end markets (apparel, general retail).
• Consumers eating at home more; canned products benefiting: CCK noted the Tampa restaurant scene is "really struggling" and consumers are eating at home more, which "generally bodes well for canned products." Read-through: Positive for AVY's food label materials — at-home consumption drives demand for packaged food products and associated labeling.

Graphic Packaging (GPK) — Q1 2026 Earnings (May 5, 2026) & Wells Fargo Conference (June 9, 2026)

Relevance to AVY: GPK is a paperboard packaging company with significant exposure to food, beverage, and consumer goods. Its commentary on inflation, pricing, and consumer demand trends is relevant to AVY's Materials Group.

• $65M more inflation than originally planned in FY26: GPK disclosed ~$65M of incremental inflation vs. its annual operating plan, driven by transport, logistics, oil/gas prices, and the Middle East conflict. GPK is treating this inflation as permanent by reengineering its cost structure. Read-through: Validates AVY's Q1 commentary that raw material inflation is running above original FY26 plan. The magnitude of GPK's inflation surprise ($65M on ~$9B revenue) is proportionally similar to AVY's "high single-digit sequential" Q2 inflation warning.
• Demand "very resilient"; no inventory buildup signals: GPK stated demand has been "very resilient" and it has "not seen spikes in any way that would suggest inventory buildup" by customers. Portfolio diversification across food, beverage, household, and health/beauty has created "quite a bit of calm" in the top line. Read-through: Constructive for AVY's Materials Group — the absence of customer inventory buildup signals suggests the pre-buy unwind in label materials is a timing issue rather than a structural demand problem.
• Value-seeking consumer; 47% of global shoppers now "value seekers": GPK noted ~47% of global shoppers are now value seekers, switching to private label, value packs, or smaller pack sizes. QSR brands increasing promotions. Read-through: Mixed for AVY — private label growth is positive for label materials volumes (more SKUs, more labels), but the shift away from branded apparel/general retail is a headwind for AVY's Solutions Group.
• Protein/GLP-1 categories winning; pack price architecture driving volume: GPK noted protein products are "winning" and portion-control formats (mini cans, smaller packs) are "very favorable" for packaging volumes. Read-through: Positive for AVY's food label materials — protein-driven categories and portion-control formats are label-intensive and align with AVY's food RFID/Intelligent Labels opportunity.

Amcor (AMCR) — Q3 FY2026 Earnings (May 6, 2026)

Relevance to AVY: Amcor is a global flexible and rigid packaging company. Its commentary on volume trends, inflation, and consumer demand in developed and emerging markets is relevant to AVY's global Materials Group business.

• Volumes down ~1.5% in Q3 (improvement from Q2); emerging markets returning to growth: Amcor reported overall volumes down ~1.5% in Q3 (improvement of 100bps vs. Q2), with North America and Europe down low-single digits but Latin America and Asia Pacific returning to mid-single-digit growth. Read-through: Neutral for AVY — the modest volume decline in developed markets is consistent with AVY's organic growth challenges, but the emerging market recovery is a positive signal for AVY's international label materials business.
• Resin up ~100% in a very short period; holding inventory strategically: Amcor noted resin prices have increased "close to 100% in a very short period" and made a strategic decision to hold more inventory (rather than reduce working capital) to ensure supply continuity for customers. This revised FY26 FCF guidance down to $1.5-1.6B from $1.8-1.9B. Read-through: Confirms the severity of petrochemical-linked raw material inflation. AVY's high single-digit sequential Q2 inflation warning is consistent with Amcor's experience. The inventory build decision by Amcor could signal that supply chain tightness is real.
• Pass-through mechanisms effective in normal ranges; additional actions needed: Amcor noted its pass-through mechanisms "function effectively in a business-as-usual environment" but when conditions move outside normal ranges, additional actions are needed. The company expects price-cost relationships to remain neutral. Read-through: Consistent with AVY's own pricing playbook — management's confidence in closing the price-inflation timing gap is supported by Amcor's experience in prior cycles.
• Consumer stretched; value-oriented essentials winning: Amcor described a "stretched consumer" with a "more uncertain consumer environment" and noted trends toward value-oriented essentials. Healthcare volumes slightly down due to winter storms and weaker cold/flu season. Read-through: Mild negative for AVY's apparel/general retail end markets. The stretched consumer dynamic is consistent with AVY's ongoing apparel softness narrative.

Ball Corporation (BALL) — Q1 2026 Earnings (May 5, 2026)

Relevance to AVY: Ball is a global aluminum beverage can manufacturer. Its commentary on beverage demand, aluminum cost pass-through, and global volume trends is relevant to AVY's food/beverage label materials end markets.

• Global volumes up ~1% in Q1; enterprise up mid-single digits in April: Ball reported global volumes up ~1% in Q1, with North America and EMEA up low-single digits. By April, enterprise volumes were up mid-single digits, with South America up 20% in April (erasing all Q1 declines). Read-through: Positive for AVY's food/beverage label materials — accelerating beverage can volumes into Q2 support label demand in this end market.
• Aluminum can "winning in every single region"; energy drinks growing unabated: Ball described the can as "winning in every single region" and taking share from other substrates. Energy drink category growth is "unabated." India growing at high-teens to 20%+ for multiple years. Read-through: Secular tailwind for AVY's label materials in beverage. Energy drink growth is particularly relevant as these products are highly label-intensive (promotional graphics, QR codes, RFID potential).
• Customers leaning into cans as value vehicle for consumers: Ball noted customers are "leaning into the can" to help consumers seeking value, with promotional activity (World Cup, America 250 labels) driving demand. Read-through: Positive for AVY's label materials — promotional activity drives label volume and complexity, supporting both base label materials and potential Intelligent Labels adoption.
• Fully contracted for 2026; >90% sold for 2027: Ball is fully contracted for 2026 and over 90% sold for 2027, with new capacity (Millersburg, OR) backed by long-term offtake agreements. Read-through: Constructive for AVY's long-term label materials demand visibility — Ball's contracted volumes provide a stable demand floor for beverage label materials.

Peer Read-Through Summary

7. Material News & Developments

Key Takeaway: The most important development since Q1 earnings is the $75M incremental Wiliot investment (announced April 27), which deepens AVY's BLE/Physical AI platform and expands the Intelligent Labels TAM by an estimated 75 billion units in condition monitoring — a long-term positive that the market has not yet priced in, given the muted stock reaction.

• April 27, 2026 — Wiliot Investment ($75M incremental): AVY announced an incremental $75M investment in Wiliot, a Bluetooth Low-Energy (BLE) sensor company, the day before Q1 earnings. The investment includes a dedicated joint go-to-market team to accelerate adoption across retail, food, and logistics. Wiliot's condition monitoring technology (temperature, humidity, light) expands the Intelligent Labels TAM by an estimated 75 billion units in the long term. Implication: Strategically significant but near-term dilutive to FCF. Market reaction was muted — watch for Q2 call commentary on early commercial traction.
• April 28, 2026 — Q1 2026 Earnings Beat; Tepid Q2 Guidance: AVY reported Q1 2026 adjusted EPS of $2.47 (beat vs. $2.42 consensus) and revenue of $2,298.5M (beat). Q2 guidance of $2.43–$2.53 EPS came in roughly in-line with consensus but below seasonal norms due to the pre-buy unwind. Stock reaction was muted. Implication: The Q1 beat was overshadowed by the Q2 guidance reset; the pre-buy unwind narrative is now fully in the market.
• April 28, 2026 — Raw Material Inflation Shift: Management disclosed that raw material deflation shifted to inflation during March 2026, with high single-digit sequential inflation expected in Q2 from petrochemical-linked commodities. Pricing actions being implemented globally, with some regions entering a second round. Implication: Key Q2 earnings risk — if inflation ran hotter than guided or pricing lagged, margins could disappoint. Peer commentary (GPK, SON, SLGN) confirms the inflation is real and broad-based.
• May 1, 2026 — Shareholders Reject Independent Chairman Proposal (8-K): AVY shareholders voted against a proposal to separate the Chairman and CEO roles at the annual meeting. Implication: Governance-related; no material impact on operations or near-term earnings.
• July 1, 2026 — Q2 2026 Earnings Webcast Announcement: AVY announced it will webcast its Q2 2026 earnings conference call, confirming the upcoming reporting event. Implication: Routine disclosure; confirms earnings date is imminent.
• Ongoing — Walmart Fresh Grocery RFID Rollout (Bakery, Meat, Deli): Management confirmed on the Q1 call that the Walmart fresh grocery rollout across bakery, meat, and deli is ramping in H2 2026. This is the key catalyst for the food Intelligent Labels inflection. Implication: The Q2 call will be closely watched for any update on rollout timing, scale, and early read-through from the Walmart program. Any acceleration would be a significant positive catalyst.
• Ongoing — Logistics Intelligent Labels Chip Transition: A key logistics customer was transitioning to an updated chip in Q1, causing inventory management headwinds and contributing to the low double-digit logistics IL decline. Management expected this to be "largely resolved by the time we get through the second quarter." Implication: Resolution of the chip transition is a binary event for Q2 IL performance. If resolved as guided, logistics IL should return to growth in Q3.
• Ongoing — Tariff Uncertainty & Apparel Sourcing Shifts: Apparel demand remains soft due to a strong pre-tariff comparison in Q1 2025 and ongoing customer inventory management. Management expects full-year growth in apparel/general retail IL despite the tough H1 comps. Implication: Tariff-driven apparel sourcing shifts (away from China/Asia) could be a medium-term positive for AVY if production moves to regions where AVY has strong label materials presence.

8. Insider Transaction Activity

Key Takeaway: No open-market buys or discretionary sells by executives since Q1 earnings — all transactions are routine RSU vesting and director equity award activity. The absence of any open-market purchases at current depressed levels (stock near 52-week lows) is notable but not alarming given the RSU-heavy compensation structure.

All transactions are routine RSU vesting and annual director equity award grants (transaction codes M and A). There are no open-market purchases (P-code) or discretionary sales (S-code) by any executive or director since the Q1 2026 earnings print. The two F-code transactions (Reverberi, Siewert) represent mandatory tax withholding on RSU vesting — obligation-driven, not a bearish signal. The absence of any open-market buying by insiders at current price levels (~$155–$167) is worth noting but is not unusual given the RSU-heavy director compensation structure. Source: Insider Transaction Data (SEC Form 4).