Avery Dennison Corporation (NYSE:AVY) today announced preliminary, unaudited results for its first quarter ended April 2, 2016. All non-GAAP financial measures referenced in this document are reconciled to GAAP in the attached tables. Unless otherwise indicated, comparisons are to the same period in the prior year.
“We’re off to a very good start to the year,” said Dean Scarborough, Avery Dennison chairman and CEO. “Both of our core businesses delivered solid organic sales growth and significant margin expansion, driving mid-teens growth in adjusted EPS, above our expectations for the quarter.
“Our consistently strong performance is testament to the strategic foundations we have laid, as well as the strength and depth of our leadership team. I am happy to say that the leadership transition we have had underway has been seamless, and I hand off my CEO duties to Mitch with complete confidence,” Scarborough added.
“I am really proud to have been a part of making Avery Dennison the leading company that it is today, and am as excited about the company’s future as I was when I joined more than thirty years ago,” said Scarborough.
“I look forward to working with our board and leadership team to continue building on our solid foundation,” said Mitch Butier, Avery Dennison president and chief operating officer. “We have excellent prospects for profitable growth, exemplified by our strong results in the first quarter.
“PSM’s solid earnings growth reflected a return to high single-digit organic growth in emerging markets, alongside outstanding productivity gains globally,” Butier added. “RBIS grew through continued momentum in radio-frequency identification products. While we have not yet met our objective to accelerate growth in core product sales, the team is executing well against its aggressive margin improvement plans for the year.
“We have raised our outlook for full-year adjusted earnings per share, reflecting some relief from currency translation headwinds, combined with strong operating performance in the first quarter,” said Butier. “We continue to remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value creation through a balance of profitable growth and capital discipline.”
First Quarter 2016 Results by Segment
All references to sales reflect comparisons on an organic basis, which exclude the estimated impact of currency translation, product line exits, and acquisitions and divestitures. Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring charges and other items, as a percentage of sales.
Pressure-sensitive Materials (PSM)
PSM sales increased approximately 4 percent. Within the segment, sales in both Label and Packaging Materials and combined Graphics and Performance Tapes increased mid-single digits.
Operating margin improved 170 basis points to 12.7 percent as the benefit of productivity initiatives and increased volume more than offset higher employee-related costs. Adjusted operating margin improved 140 basis points.
Retail Branding and Information Solutions (RBIS)
RBIS sales increased approximately 4 percent.
Operating margin increased 200 basis points to 6.9 percent as the benefit of productivity initiatives and increased volume more than offset higher employee-related costs. Adjusted operating margin increased 140 basis points.
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