Avery Dennison (AVY) to Report Q2 Earnings: What's in Store?
Avery Dennison Corporation AVY is scheduled to report second-quarter 2023 results before the opening bell on Jul 25.
Q2 Estimates
The Zacks Consensus Estimate for second-quarter total sales is pegged at $2.17 billion, suggesting a decline of 7.5% from the prior-year quarter’s reported figure. The consensus mark for the company’s earnings per share is pinned at $2.03, indicating a year-over-year decrease of 23.1%. The earnings estimate has moved down 0.9% in the past 60 days.
Avery Dennison Corporation Price and EPS Surprise
Avery Dennison Corporation price-eps-surprise | Avery Dennison Corporation Quote
Q1 Performance
Avery Dennison’s revenues and earnings declined year over year in the first quarter of 2023. The bottom line surpassed the Zacks Consensus Estimate, while the top line missed the same. AVY has a trailing four-quarter negative earnings surprise of -2.6%, on average.
Factors at Play
Avery Dennison has been witnessing solid demand for the labeling of non-durable consumer goods like food, beverage, home and personal care products. However, strong demand and supply constraints are likely to have elevated raw material, labor and freight costs in the quarter under review.
Nonetheless, Avery Dennison has been executing several pricing and re-engineering actions to mitigate inflationary cost pressure. It has also announced additional price increases in most of its businesses worldwide.
However, in the first quarter of 2023, apparel inventory reductions were widespread across all segments, which led to a decline in volumes. The destocking is likely to have continued in the Materials Group segment in the second quarter, as retailers work through their high inventories, model predicts that Materials Group’s organic sales will be down 7.3% year over year in the quarter.
The Solutions Group segment is likely to have benefited from solid margin expansions, driven by strength in high-value categories and the base business. However, cost and supply-chain headwinds are expected to have offset the benefits in the second quarter. We expect the segment’s organic sales to be down 3.2% year over year in the second quarter.
Currency translation is also likely to have hurt the company’s top-line growth in the quarter. We expect a 2.1% headwind from unfavorable currency translation in the second quarter of 2023.
What the Zacks Model Indicates
Our proven model does not conclusively predict an earnings beat for Avery Dennison this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
You can uncover the best stocks before they're reported with our Earnings ESP Filter.
Earnings ESP: Avery Dennison has an Earnings ESP of -4.04%.
Zacks Rank: Avery Dennison currently carries a Zacks Rank of 3.
Price Performance
Avery Dennison’s shares have gained 0.8% in the past year against the industry’s fall of 0.9%.
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Stocks That Warrant a Look
Here are some stocks with the right combination of elements to post an earnings beat in their upcoming releases.
EnerSys ENS, expected to release earnings soon, has an Earnings ESP of +8.32% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ENS’ fiscal first-quarter earnings is pegged at $1.64 per share, suggesting a year-over-year improvement of 42.6%. The company has a trailing four-quarter surprise of 9%, on average.
AptarGroup, Inc. ATR, scheduled to release earnings on Jul 27, has an Earnings ESP of +1.77%.
The Zacks Consensus Estimate for ATR’s earnings for the second quarter is pegged at $1.13 per share. It currently carries a Zacks Rank of 2. The company has a trailing four-quarter surprise of 6.4%, on average.
Eaton Corporation plc ETN, expected to release earnings shortly, has an Earnings ESP of +0.18%.
The consensus estimate for Eaton’s earnings for the second quarter is currently pegged at $2.11 per share. ETN currently carries a Zacks Rank of 3. The company has a trailing four-quarter surprise of 2.5%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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