Avery Dennison Corp

Previous wording

•Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, the currency adjustments for transitional reporting of highly inflationary economies and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for an extra week in our fiscal year and the calendar shift resulting from an extra week in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current period average exchange rates to exclude the effect of foreign currency fluctuations. Our 2025 fiscal year that began on December 29, 2024 will end on December 31, 2025; fiscal years 2026 and beyond will be coincident with the calendar year beginning on January 1 and ending on December 31.

Current wording

•Sales change ex. currency refers to the increase or decrease in net sales, excluding the estimated impact of foreign currency translation, and, where applicable, the currency adjustments for transitional reporting of highly inflationary economies and the reclassification of sales between segments. Additionally, where applicable, sales change ex. currency is also adjusted for extra days in our fiscal year and the calendar shift resulting from extra days in the prior fiscal year. The estimated impact of foreign currency translation is calculated on a constant currency basis, with prior-period results translated at current-period average exchange rates to exclude the effect of foreign currency fluctuations. Our 2025 fiscal year that began on December 29, 2024 will end on December 31, 2025; fiscal years 2026 and beyond will be coincident with the calendar year beginning on January 1 and ending on December 31.

Previous wording

In January 2025, the Audit Committee of our Board of Directors approved a change to our previous 52- or 53-week fiscal year generally ending on the Saturday closest to December 31 to a fiscal year coincident with the calendar year. Our 2025 fiscal year that began on December 29, 2024 will end on December 31, 2025 and fiscal years 2026 and beyond will begin on January 1 and end on December 31.

Current wording

In January 2025, the Audit Committee of our Board of Directors approved a change to our previous 52- or 53-week fiscal year generally ending on the Saturday closest to December 31 to a fiscal year coincident with the calendar year. Our 2025 fiscal year that began on December 29, 2024 will end on December 31, 2025; fiscal years 2026 and beyond will begin on January 1 and end on December 31.

Previous wording

Net income increased from approximately $349 million in the first six months of 2024 to approximately $355 million in the first six months of 2025. The primary factors affecting this increase were:

Current wording

Net income decreased from approximately $531 million in the first nine months of 2024 to approximately $522 million in the first nine months of 2025. The primary factors affecting this decrease were:

Previous wording

These items were partially offset by the net impact of raw material deflation-related price reductions.

Current wording

•The net impact of raw material deflation-related price reductions

Previous wording

We recorded $12.9 million in restructuring charges, net of reversals, during the six months ended June 28, 2025. These charges consisted of severance and related costs for the reduction of approximately 460 positions, as well as asset impairment charges, at various locations across our company. Our 2025 actions are primarily intended to optimize our operational footprint.

Current wording

We recorded $22.8 million in restructuring charges, net of reversals, during the nine months ended September 27, 2025. These charges consisted of severance and related costs for the reduction of approximately 770 positions, as well as asset impairment charges, at various locations across our company. Our 2025 actions are primarily intended to optimize our operational footprint.

Previous wording

During the first six months of 2025, net cash provided by operating activities decreased compared to the same period last year primarily due to higher incentive compensation payments, changes in operational working capital, higher trade rebate payments, and tax payments, net of refunds, partially offset by the prior-year settlement payment for the Adasa legal matter. During the first six months of 2025, adjusted free cash flow decreased compared to the same period last year primarily due to a decrease in net cash provided by operating activities, partially offset by lower purchases of property, plant and equipment and higher proceeds from the sales of property, plant and equipment.

Current wording

During the first nine months of 2025, net cash provided by operating activities decreased compared to the same period last year primarily due to higher incentive compensation payments, changes in operational working capital, higher tax payments, net of refunds, and higher trade rebate payments, partially offset by the prior-year settlement payment for the Adasa legal matter. During the first nine months of 2025, adjusted free cash flow decreased compared to the same period last year primarily due to a decrease in net cash provided by operating activities, partially offset by lower purchases of property, plant and equipment and higher proceeds from the sales of property, plant and equipment.

Previous wording

Beginning in the first quarter of 2025, the U.S. announced tariffs on goods imported into the U.S. from numerous countries, many of which responded with reciprocal tariffs and other actions on goods imported from the U.S. The U.S. government continues to negotiate with other countries regarding the tariffs; to enable these negotiations, it paused certain of these tariffs until August 1, 2025. As it relates to the direct impact of these tariffs, a relatively small portion of our global materials purchases is impacted and the vast majority of our imports and exports between the U.S., Canada and Mexico are compliant with the United States-Mexico-Canada Agreement (“USMCA”). Based on current information, we estimate that the overall direct impact will likely increase our total raw material costs by a low single digit rate. To mitigate the direct impact to our operations, we have implemented strategic sourcing adjustments and pricing surcharges. The indirect impact on demand for our products and solutions is more uncertain. While a majority of our products and solutions relates to less discretionary consumer staples, we also serve more discretionary and cyclical markets, such as industrials, durables and apparel. In the second quarter of 2025, we estimated that the indirect impact on apparel end markets resulted in a mid-single digit rate decrease in our sales in overall apparel categories.

Current wording

Beginning in the first quarter of 2025, the U.S. announced tariffs on goods imported into the U.S. from numerous countries, many of which responded with reciprocal tariffs and other actions on goods imported from the U.S. The U.S. government continues to negotiate with other countries regarding the tariffs. As it relates to the direct impact of these tariffs, a relatively small portion of our global materials purchases is impacted. To mitigate this direct impact to our operations, we have implemented strategic sourcing adjustments and pricing surcharges. The indirect impact on demand for our products and solutions is more uncertain. While a majority of our products and solutions relates to less discretionary consumer staples, we also serve more discretionary and cyclical markets, such as industrials, durables and apparel. We estimate that the indirect impact of tariffs resulted in an aggregate low single digit rate decrease in sales in our overall apparel categories over the second and third quarters of 2025.

Previous wording

•We anticipate elevated uncertainty related to trade policy and the macroeconomic environment.

Current wording

•We anticipate continued uncertainty related to trade policy and the macroeconomic environment.

Previous wording

ANALYSIS OF RESULTS OF OPERATIONS FOR THE SECOND QUARTER

Current wording

ANALYSIS OF RESULTS OF OPERATIONS FOR THE THIRD QUARTER

Previous wording

Gross profit for the second quarter of 2025 decreased from the same period last year due to the net impact of raw material deflation-related price reductions and higher employee-related costs, partially offset by higher volume/mix and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs.

Current wording

Gross profit for the third quarter of 2025 increased from the same period last year due to higher volume/mix and benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, partially offset by the net impact of raw material deflation-related price reductions and higher employee-related costs.

Previous wording

Interest expense increased in the second quarter of 2025 compared to the same period last year primarily due to higher interest related to the €500 million of senior notes we issued in November 2024 and an increase in commercial paper borrowings.

Current wording

Interest expense increased in the third quarter of 2025 compared to the same period last year primarily due to the €500 million of senior notes we issued in November 2024.

Previous wording

Our effective tax rate for the three months ended June 28, 2025 was comparable to the same period last year. Refer to Note 6, “Taxes Based on Income,” to the unaudited Condensed Consolidated Financial Statements for more information.

Current wording

Our effective tax rate for the three months ended September 27, 2025 increased compared to the same period last year primarily due to lower discrete tax benefits and a higher net charge related to the U.S. tax on foreign earnings. Refer to Note 6, “Taxes Based on Income,” to the unaudited Condensed Consolidated Financial Statements for more information.

Previous wording

RESULTS OF OPERATIONS BY REPORTABLE SEGMENT FOR THE SECOND QUARTER

Current wording

RESULTS OF OPERATIONS BY REPORTABLE SEGMENT FOR THE THIRD QUARTER

Previous wording

During the fourth quarter of 2024, we modified our segment performance measure to exclude other expense (income), net. These changes align with how our chief operating decision maker evaluates segment performance and allocates resources. Prior-year periods have been conformed to the current period presentation. Segment adjusted operating income is defined as income before taxes adjusted for other expense (income), net; interest expense; other non-operating expense (income), net; and other items.

Current wording

During the fourth quarter of 2024, we modified our segment performance measure to exclude other expense (income), net. This change aligns with how our chief operating decision maker evaluates segment performance and allocates resources. Prior-year periods have been conformed to the current-period presentation. Segment adjusted operating income is defined as income before taxes adjusted for other expense (income), net; interest expense; other non-operating expense (income), net; and other items.

Previous wording

(1)Segment adjusted operating income excluded other expense (income), net, and other items of $(7.0) million and $21.1 million in the second quarter of 2025 and 2024, respectively. Exclusions related to charges associated with restructuring actions, losses from Argentine peso remeasurement and Blue Chip Swap transactions, (gain) loss on venture and other investments, (gain) loss of sales of assets and outcomes of legal matters and settlements, net.

Current wording

(1)Segment adjusted operating income excluded other expense (income), net, and other items of $13.6 million and $4.4 million in the third quarters of 2025 and 2024, respectively. Exclusions related to charges associated with restructuring actions, outcomes of legal matters and settlements, net, (gain) loss on venture and other investments, transaction and related costs, and losses from Argentine peso remeasurement and Blue Chip Swap transactions.

Previous wording

In the first six months of 2025, net sales were comparable on an organic basis compared to the same period in the prior year mainly due to higher volume/mix offsetting the impact of raw material deflation-related price reductions. On an organic basis, net sales increased by a low single digit rate in North America, decreased by a low single digit rate in Europe, the Middle East and North Africa, were comparable in Asia Pacific and increased by a mid-single digit rate in Latin America.

Current wording

In the third quarter of 2025, net sales decreased on an organic basis compared to the same period in the prior year primarily due to the impact of raw material deflation-related price reductions, partially offset by favorable volume/mix. On an organic basis, net sales were comparable in North America, decreased by a low single digit rate in Europe, the Middle East and North Africa, and decreased by low single digit rates in Asia Pacific and Latin America.

Previous wording

Segment adjusted operating income decreased in the second quarter of 2025 compared to the same period last year primarily due to the net impact of pricing and raw material input costs, partially offset by productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, and favorable volume/mix.

Current wording

Segment adjusted operating income increased in the third quarter of 2025 compared to the same period last year primarily due to productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, and favorable volume/mix, partially offset by the net impact of pricing and raw material input costs.

Previous wording

In the second quarter of 2025, net sales decreased on an organic basis compared to the same period in the prior year due to a low single digit rate increase in high-value categories, which was more than offset by a decrease of a mid-single digit rate in the base business. Company-wide, on an organic basis, net sales of intelligent labels were comparable to the same period in the prior year.

Current wording

In the third quarter of 2025, net sales increased on an organic basis compared to the same period in the prior year due to a high single digit rate increase in high-value categories, partially offset by a low single digit rate decrease in the base business. Company-wide, on an organic basis, net sales of intelligent labels increased by a low single digit rate compared to the same period in the prior year.

Previous wording

ANALYSIS OF RESULTS OF OPERATIONS FOR THE SIX MONTHS YEAR-TO-DATE

Current wording

ANALYSIS OF RESULTS OF OPERATIONS FOR THE NINE MONTHS YEAR-TO-DATE

Previous wording

Gross profit for the first six months of 2025 decreased from the same period last year primarily due to the net impact of pricing and raw material input costs, higher employee-related costs and the impact of unfavorable foreign currency translation, partially offset by benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, and higher volume/mix.

Current wording

Gross profit for the first nine months of 2025 decreased from the same period last year primarily due to the net impact of pricing and raw material input costs and higher employee-related costs, partially offset by benefits from productivity initiatives, including material re-engineering and savings from restructuring actions, net of transition costs, and higher volume/mix.

Previous wording

Marketing, general and administrative expense decreased in the first six months of 2025 compared to the same period last year primarily due to lower employee-related costs and benefits from productivity initiatives, including temporary cost-saving actions and savings from restructuring actions, net of transition costs, partially offset by growth investments.

Current wording

Marketing, general and administrative expense decreased in the first nine months of 2025 compared to the same period last year primarily due to lower employee-related costs and benefits from productivity initiatives, including temporary cost-saving actions and savings from restructuring actions, net of transition costs, partially offset by growth investments.

Previous wording

Interest expense increased for the six months of 2025 compared to the same period last year primarily due to higher interest related to the €500 million of senior notes we issued in November 2024 and an increase in commercial paper borrowings.

Current wording

Interest expense increased for the nine months of 2025 compared to the same period last year primarily due to the €500 million of senior notes we issued in November 2024.

Previous wording

Our effective tax rate for the six months ended June 28, 2025 was comparable to the same period last year. Refer to Note 6, “Taxes Based on Income,” to the unaudited Condensed Consolidated Financial Statements for more information.

Current wording

Our effective tax rate for the nine months ended September 27, 2025 increased compared to the same period last year primarily due to lower discrete tax benefits and a higher net charge related to the U.S. tax on foreign earnings. Refer to Note 6, “Taxes Based on Income,” to the unaudited Condensed Consolidated Financial Statements for more information.

Previous wording

RESULTS OF OPERATIONS BY REPORTABLE SEGMENT FOR THE SIX MONTHS YEAR-TO-DATE

Current wording

RESULTS OF OPERATIONS BY REPORTABLE SEGMENT FOR THE NINE MONTHS YEAR-TO-DATE

Previous wording

(1)Segment adjusted operating income excluded other expense (income), net, and other items of $(2.6) million and $35.5 million in the first six months of 2025 and 2024, respectively. Exclusions related to charges associated with restructuring actions, losses from Argentine peso remeasurement and Blue Chip Swap transactions, (gain) loss on venture and other investments, (gain) loss of sales of assets and outcomes of legal matters and settlements, net.

Current wording

(1)Segment adjusted operating income excluded other expense (income), net, and other items of $11.0 million and $39.9 million in the first nine months of 2025 and 2024, respectively. Exclusions related to charges associated with restructuring actions, outcomes of legal matters and settlements, net, (gain) loss on venture and other investments, transaction and related costs, losses from Argentine peso remeasurement and Blue Chip Swap transactions and (gain) loss on sales of assets.

Previous wording

In the second quarter of 2025, net sales decreased on an organic basis compared to the same period in the prior year mainly due to the impact of raw material deflation-related price reductions, partially offset by favorable volume/mix. On an organic basis, net sales increased by a low single digit rate in North America, decreased by a mid-single digit rate in Europe, the Middle East and North Africa, were comparable in Asia Pacific and increased by a mid-single digit rate in Latin America.

Current wording

In the first nine months of 2025, net sales decreased on an organic basis compared to the same period in the prior year primarily due to the impact of raw material deflation-related price reductions, partially offset by favorable volume/mix. On an organic basis, net sales increased by a low single digit rate in North America, decreased by a low single digit rate in Europe, the Middle East and North Africa, were comparable in Asia Pacific and increased by a low single digit rate in Latin America.

Previous wording

In the first six months of 2025, net sales increased on an organic basis compared to the same period in the prior year due to low single digit rate increases in high-value categories and the base business. Company-wide, on an organic basis, net sales of intelligent labels increased by a low single digit rate compared to the same period in the prior year.

Current wording

In the first nine months of 2025, net sales increased on an organic basis compared to the same period in the prior year due to a mid-single digit rate increase in high-value categories and a low single digit rate increase in the base business. Company-wide, on an organic basis, net sales of intelligent labels increased by a low single digit rate compared to the same period in the prior year.

Previous wording

Segment adjusted operating income increased in the first six months of 2025 compared to the same period last year primarily due to benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, and higher volume, partially offset by the net impact of pricing and raw material costs and growth investments.

Current wording

Segment adjusted operating income decreased in the first nine months of 2025 compared to the same period last year primarily due to the net impact of pricing and raw material costs, higher employee-related costs and growth investments, partially offset by benefits from productivity initiatives, including savings from restructuring actions, net of transition costs, and higher volume.

Previous wording

During the first six months of 2025, net cash provided by operating activities decreased compared to the same period last year primarily due to higher incentive compensation payments, changes in operational working capital, higher trade rebate payments, and tax payments, net of refunds, partially offset by the prior-year settlement payment for the Adasa legal matter.

Current wording

During the first nine months of 2025, net cash provided by operating activities decreased compared to the same period last year primarily due to higher incentive compensation payments, changes in operational working capital, higher tax payments, net of refunds, and higher trade rebate payments, partially offset by the prior-year settlement payment for the Adasa legal matter.

Previous wording

During the first six months of 2025, in our Materials Group reportable segment, we primarily invested in equipment to support growth in the U.S., certain countries in Europe and certain countries in Asia Pacific, primarily China; in our Solutions Group reportable segment, we primarily invested in buildings and equipment to support growth in certain countries in Asia Pacific, including Vietnam and China, and in the U.S. During the first six months of 2024, in our Solutions Group reportable segment, we primarily invested in buildings and equipment in certain countries in Asia Pacific, including China and Vietnam, in the U.S. and in certain countries in Latin America, primarily Mexico; in our Materials Group reportable segment, we primarily invested in buildings and equipment to support growth in the U.S. and certain countries in Europe, primarily France.

Current wording

During the first nine months of 2025, in our Materials Group reportable segment, we primarily invested in equipment to support growth in the U.S., certain countries in Europe and certain countries in Asia Pacific, primarily China; in our Solutions Group reportable segment, we primarily invested in buildings and equipment to support growth in certain countries in Asia Pacific, including China and Vietnam, and in the U.S. During the first nine months of 2024, in our Solutions Group reportable segment, we primarily invested in buildings and equipment in certain countries in Asia Pacific, including China and Vietnam, in the U.S. and in certain countries in Latin America, primarily Mexico; in our Materials Group reportable segment, we primarily invested in buildings and equipment to support growth in the U.S. and certain countries in Europe, primarily France.

Previous wording

During the first six months of 2025 and 2024, we primarily invested in information technology upgrades in the U.S.

Current wording

During the first nine months of 2025 and 2024, we primarily invested in information technology upgrades in the U.S.

Previous wording

During the first six months of 2024, we entered into Blue Chip Swap transactions that resulted in losses of approximately $10 million. Refer to Note 12, “Supplemental Financial Information,” to the unaudited Condensed Consolidated Financial Statements for more information.

Current wording

During the first nine months of 2024, we entered into Blue Chip Swap transactions that resulted in losses of approximately $10 million. Refer to Note 12, “Supplemental Financial Information,” to the unaudited Condensed Consolidated Financial Statements for more information.

Previous wording

During the first six months of 2025, we received proceeds from the sale of property in China.

Current wording

During the first nine months of 2025, we received proceeds from the sale of properties in China and Vietnam.

Previous wording

During the first six months of 2025, we settled €420 million notional amount of net investment hedges.

Current wording

During the first nine months of 2025, we settled €420 million notional amount of net investment hedges.

Previous wording

During the first six months of 2025 and 2024, our commercial paper borrowings were used to fund the repayment of long-term debt, dividend payments, share repurchases, capital expenditures and other general corporate purposes.

Current wording

During the first nine months of 2025 and 2024, our commercial paper borrowings were used to fund the repayment of long-term debt, dividend payments, share repurchases, capital expenditures and other general corporate purposes.

Previous wording

We paid dividends of $1.82 per share in the first six months of 2025 compared to $1.69 per share in the same period last year. In April 2025, we increased our quarterly dividend rate to $0.94 per share, representing an increase of approximately 7% from our previous quarterly dividend rate of $0.88 per share.

Current wording

We paid dividends of $2.76 per share in the first nine months of 2025 compared to $2.57 per share in the same period last year. In April 2025, we increased our quarterly dividend rate to $0.94 per share, representing an increase of approximately 7% from our previous quarterly dividend rate of $0.88 per share.

Previous wording

During the first six months of 2025 and 2024, we repurchased approximately 2.0 million and 0.2 million shares of our common stock, respectively.

Current wording

During the first nine months of 2025 and 2024, we repurchased approximately 2.5 million and 0.5 million shares of our common stock, respectively.

Previous wording

Tax withholding for stock-based compensation was lower in the first six months of 2025 compared to 2024 primarily due to a lower number of shares vesting for certain performance-based awards based on our performance against the objectives established for the awards.

Current wording

During the first nine months of 2024, the number of stock options exercised was approximately 0.1 million. Tax withholding for stock-based compensation was lower in the first nine months of 2025 compared to 2024 primarily due to a lower number of shares vesting for certain performance-based awards based on our performance against the objectives established for the awards.

Previous wording

During the first six months of 2025, we settled €420 million notional amount of fair value hedges.

Current wording

During the first nine months of 2025, we settled €420 million notional amount of fair value hedges.

Previous wording

In the six months ended June 28, 2025, goodwill increased by approximately $52 million to $2.03 billion, reflecting the impact of foreign currency translation.

Current wording

In the nine months ended September 27, 2025, goodwill increased by approximately $53 million to $2.03 billion, reflecting the impact of foreign currency translation.