NYSE listed Avery Dennison, a marketer of labeling, packaging materials and solutions reported a 6 per cent year over year slip in sales in the three months to June 30, 2015.
An Avery Dennison press release informed that net sales declined approximately 6 per cent over the same quarter of the previous quarter to $1.52 billion in the second quarter of 2015.
However, on an organic basis, net sales were up approximately 4 per cent over the second quarter of 2014.
Segment wise, Pressure-sensitive Materials (PSM) sales rose around 6 per cent, within which sales of both Label and Packaging Materials and combined Graphics and Performance Tapes rose in mid-single digits.
Operating margin of the PSM division improved 440 basis points to 11.7 per cent from impact of lower restructuring costs, productivity initiatives, higher volume, and benefit from price and raw material input costs.
But, sales of the Retail Branding and Information Solutions (RBIS) division in the reporting quarter were down 2 per cent over the prior year second quarter.
Operating margin of RBIS segment declined 420 basis points to 2.6 per cent driven by higher restructuring charges, costs associated with a product line divestiture, lower sales, and higher employee costs.
During the quarter under review, the company repurchased 0.5 million shares at an aggregate cost of $28 million.
The second quarter of 2015 effective tax rate was 36 per cent, while adjusted tax rate was 34 per cent, consistent with its anticipated full year tax rate in the low to mid-thirty percent range.
It also updated its 2015 reported EPS guidance to between $2.82 and $3.02, reflecting loss on sale and exit costs associated with a product line divestiture in the second quarter.
However, Avery Dennison did not change the full year guidance for adjusted EPS growth of 5 to 11 per cent.
“I am pleased to report another solid quarter of progress against our long-term strategic and financial objectives,” said Dean Scarborough, Avery Dennison chairman and CEO.
"Sales were up 4 per cent on an organic basis, as exceptional performance in Pressure-sensitive Materials offset a decline in Retail Branding and Information Solutions,” he added.
“Despite the headwind from currency translation, we delivered mid-teens growth in adjusted earnings per share and continued to expand adjusted operating margin,” Scarborough informed.
Scarborough concluded by saying, “Overall, I remain confident that the consistent execution of our strategies, including the turnaround in RBIS, will enable us to meet our long-term goals."
