“We are off to a strong start to the year, with solid top-line performance and double-digit earnings growth,” said Mitch Butier, Avery Dennison president and CEO. “Label and Graphic Materials delivered another strong quarter; Retail Branding and Information Solutions continues to drive volume growth and improved profitability; and, within Industrial and Healthcare Materials, solid growth in industrial categories mostly offset the anticipated decline in healthcare.”
Label and Graphic Materials’ reported sales increased 7.6%; on an organic basis, sales grew an estimated 4.9%. Sales on an organic basis increased mid-single digits in Label and Packaging Materials and increased low-single digits in the combined Graphics and Reflective Solutions businesses. Operating margin of 12.5% was flat to prior year as the benefits of increased volume and productivity initiatives were offset by unfavorable mix and higher employee costs.
Retail Branding and Information Solutions’ reported sales increased 2.0%; on an organic basis, sales grew an estimated 2.9%.
Operating margin improved 130 basis points to 7.3% as the benefits of productivity initiatives and increased volume were partially offset by increased employee costs.
Industrial and Healthcare Materials’ reported sales increased 2.0%; sales declined an estimated 1.3% on an organic basis. Sales in industrial categories increased mid-single digits on an organic basis, mostly offsetting the anticipated decline in healthcare categories. Operating margin declined 270 basis points to 11.1% largely due to the expected decline in sales for healthcare categories.