Avery Dennison has reported its first quarter 2026 financial results, posting adjusted earnings per share of $2.47, a 7.4% increase compared to the same period last year. The global materials science and digital identification company recorded net sales of $2.3 billion, representing a 7.0% rise year-over-year, with organic sales growth coming in at 1.1%.
The results come at a pivotal time for Avery Dennison’s RFID and digital identification business, which sits within the company’s Solutions Group. While the broader company delivered solid top-line growth, the Solutions Group saw sales decline 2.8% to $649 million during the quarter, with adjusted operating margin falling 120 basis points to 9.0%.
Within the Solutions Group, performance was mixed. High-value categories including Embelex and Vestcom grew at mid-single digit rates, but the Intelligent Labels division, which encompasses Avery Dennison’s UHF RFID inlay and tag business, declined modestly. The Intelligent Labels unit is one of the world’s largest producers of UHF RFID tags and inlays, supplying major retailers and brands across the fashion, retail and logistics sectors.
CEO Deon Stander pointed to the resilience of the company’s overall portfolio, noting that results reflected its ability to deliver growth in what he described as a dynamic environment. The modest decline in Intelligent Labels comes after a period of rapid expansion in prior years, driven by large-scale RFID rollouts across global retail.
The company’s Materials Group performed more strongly, with sales increasing 11.4% to $1.6 billion. On a constant currency basis, growth was 3.6%. Adjusted operating margin for the segment was 15.4%, down 20 basis points from the prior year. Base categories in the Materials Group grew at mid-single digit rates, while high-value categories saw a slight decline.
Avery Dennison continued to return capital to shareholders during the quarter, distributing $133 million through dividends and repurchasing $61 million in shares. The company’s net debt-to-adjusted EBITDA ratio stood at 2.4 times at the end of the period. Reported earnings per share for the quarter were $2.18.
Looking ahead, Avery Dennison provided guidance for the second quarter of 2026, forecasting adjusted EPS in the range of $2.43 to $2.53. Industry analysts will be watching the Intelligent Labels business closely in coming quarters, as adoption of UHF RFID technology continues to expand beyond fashion retail into food, logistics and healthcare applications.
The slight pullback in Intelligent Labels growth is not uncommon in quarters where large deployment programmes reach completion milestones before new rollouts begin. Avery Dennison remains a dominant force in the UHF RFID market and continues to invest in next-generation digital identification solutions.