Avery Dennison Corporation (NYSE:AVY) reported a Q3 FY23 sales decline of 9.4% Y/Y to $2.098 billion, missing the analyst consensus of $2.17 billion.
Reported sales for the Materials group decreased by 14% Y/Y to $1.456 billion, and the Solutions Group increased by 3.1% Y/Y to $642.3 million.
Gross profit fell to $585.8 million from $619.2 million a year ago.
The company reported an adjusted operating margin of 12.1%, a contraction from 12.4% the prior year, with adjusted operating income declining to $253.2 million from $288.4 million the prior year.
The company held $209.9 million in cash and equivalents as of quarter end.
Adjusted EPS of $2.10 was in line with the consensus.
“We expect further sequential improvement in the fourth quarter, as the pace of inventory destocking continues to moderate and non-apparel intelligent label programs accelerate,” said Deon Stander, president and CEO.
Earlier this month, the company announced an agreement to acquire Silver Crystal Group, expanding its external embellishments portfolio, with annual sales of approximately $30 million.
Outlook: AVY expects Q4 2023 adjusted EPS of $2.10-$2.25 vs. consensus of $2.32.
Price Action: AVY shares are trading lower by 3.53% at $166.96 on the last check Wednesday.
