filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (Dollars in millions, except per share amount) | September 27, 2025 | December 28, 2024 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 536.3 | $ | 329.1 | |||||||
| Trade accounts receivable, less allowances of $29.6 and $29.0 at September 27, 2025 and December 28, 2024, respectively | 1,627.8 | 1,466.2 | |||||||||
| Inventories | 1,037.4 | 978.1 | |||||||||
| Other current assets | 322.2 | 305.3 | |||||||||
| Total current assets | 3,523.7 | 3,078.7 | |||||||||
| Property, plant and equipment, net | 1,579.9 | 1,586.7 | |||||||||
| Goodwill | 2,029.5 | 1,976.2 | |||||||||
| Other intangibles resulting from business acquisitions, net | 694.4 | 755.3 | |||||||||
| Deferred tax assets | 132.3 | 110.0 | |||||||||
| Other assets | 907.1 | 897.3 | |||||||||
| Total assets | $ | 8,866.9 | $ | 8,404.2 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Short-term borrowings and current portion of long-term debt and finance leases | $ | 578.8 | $ | 592.3 | |||||||
| Accounts payable | 1,303.2 | 1,340.7 | |||||||||
| Accrued payroll and employee benefits | 243.4 | 288.9 | |||||||||
| Other current liabilities | 661.7 | 640.7 | |||||||||
| Total current liabilities | 2,787.1 | 2,862.6 | |||||||||
| Long-term debt and finance leases | 3,202.3 | 2,559.9 | |||||||||
| Long-term retirement benefits and other liabilities | 436.7 | 434.6 | |||||||||
| Deferred tax liabilities and income taxes payable | 229.8 | 234.8 | |||||||||
| Commitments and contingencies (see Note 10) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Common stock, $1 par value per share, authorized – 400,000,000 shares at September 27, 2025 and December 28, 2024; issued – 124,126,624 shares at September 27, 2025 and December 28, 2024; outstanding – 77,545,388 shares and 79,800,396 shares at September 27, 2025 and December 28, 2024, respectively | 124.1 | 124.1 | |||||||||
| Capital in excess of par value | 829.6 | 840.6 | |||||||||
| Retained earnings | 5,498.3 | 5,151.2 | |||||||||
| Treasury stock at cost, 46,581,236 shares and 44,326,228 shares at September 27, 2025 and December 28, 2024, respectively | (3,784.7) | (3,347.5) | |||||||||
| Accumulated other comprehensive loss | (456.3) | (456.1) | |||||||||
| Total shareholders’ equity | 2,211.0 | 2,312.3 | |||||||||
| Total liabilities and shareholders’ equity | $ | 8,866.9 | $ | 8,404.2 |
See Notes to Unaudited Condensed Consolidated Financial Statements
Avery Dennison Corporation
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions, except per share amounts) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Net sales | $ | 2,215.5 | $ | 2,183.4 | $ | 6,584.3 | $ | 6,570.0 | |||||||||||||||
| Cost of products sold | 1,580.5 | 1,556.8 | 4,688.7 | 4,648.5 | |||||||||||||||||||
| Gross profit | 635.0 | 626.6 | 1,895.6 | 1,921.5 | |||||||||||||||||||
| Marketing, general and administrative expense | 353.9 | 346.9 | 1,053.3 | 1,086.0 | |||||||||||||||||||
| Other expense (income), net | 16.7 | 15.3 | 37.1 | 54.9 | |||||||||||||||||||
| Interest expense | 33.3 | 30.0 | 98.2 | 87.8 | |||||||||||||||||||
| Other non-operating expense (income), net | (3.7) | (4.9) | (10.3) | (19.3) | |||||||||||||||||||
| Income before taxes | 234.8 | 239.3 | 717.3 | 712.1 | |||||||||||||||||||
| Provision for income taxes | 68.5 | 57.6 | 195.7 | 181.2 | |||||||||||||||||||
| Net income | $ | 166.3 | $ | 181.7 | $ | 521.6 | $ | 530.9 | |||||||||||||||
| Per share amounts: | |||||||||||||||||||||||
| Net income per common share | $ | 2.13 | $ | 2.26 | $ | 6.64 | $ | 6.60 | |||||||||||||||
| Net income per common share, assuming dilution | $ | 2.13 | $ | 2.25 | $ | 6.64 | $ | 6.56 | |||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||
| Common shares | 77.9 | 80.5 | 78.5 | 80.5 | |||||||||||||||||||
| Common shares, assuming dilution | 78.0 | 80.8 | 78.6 | 80.9 |
See Notes to Unaudited Condensed Consolidated Financial Statements
Avery Dennison Corporation
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Net income | $ | 166.3 | $ | 181.7 | $ | 521.6 | $ | 530.9 | |||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation | (4.3) | 35.1 | (1.9) | 5.4 | |||||||||||||||||||
| Pension and other postretirement benefits | .4 | .5 | 1.5 | .9 | |||||||||||||||||||
| Cash flow hedges | (1.8) | 1.7 | 1.9 | 1.4 | |||||||||||||||||||
| Fair value hedges | (.6) | — | (1.7) | — | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | (6.3) | 37.3 | (.2) | 7.7 | |||||||||||||||||||
| Total comprehensive income, net of tax | $ | 160.0 | $ | 219.0 | $ | 521.4 | $ | 538.6 |
See Notes to Unaudited Condensed Consolidated Financial Statements
Avery Dennison Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited**)**
| Nine Months Ended | |||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | |||||||||
| Operating Activities | |||||||||||
| Net income | $ | 521.6 | $ | 530.9 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 154.6 | 147.5 | |||||||||
| Amortization | 88.1 | 86.5 | |||||||||
| Provision for credit losses and sales returns | 39.2 | 38.2 | |||||||||
| Stock-based compensation | 22.7 | 24.2 | |||||||||
| Deferred taxes and other non-cash taxes | (14.7) | (3.0) | |||||||||
| Other non-cash expense and loss (income and gain), net | 31.7 | 59.7 | |||||||||
| Changes in assets and liabilities and other adjustments | (338.6) | (296.4) | |||||||||
| Net cash provided by operating activities | 504.6 | 587.6 | |||||||||
| Investing Activities | |||||||||||
| Purchases of property, plant and equipment | (101.9) | (139.3) | |||||||||
| Purchases of software and other deferred charges | (22.9) | (22.1) | |||||||||
| Purchases of Argentine Blue Chip Swap securities | — | (34.2) | |||||||||
| Proceeds from sales of Argentine Blue Chip Swap securities | — | 24.0 | |||||||||
| Proceeds from sales of property, plant and equipment | 20.2 | .4 | |||||||||
| Proceeds from insurance and sales (purchases) of investments, net | 4.5 | 3.6 | |||||||||
| Proceeds from settlement of net investment hedges | 6.2 | — | |||||||||
| Payments for acquisitions, net of cash acquired, and venture investments | (10.7) | (1.9) | |||||||||
| Net cash used in investing activities | (104.6) | (169.5) | |||||||||
| Financing Activities | |||||||||||
| Net increase (decrease) in borrowings with maturities of three months or less | 482.0 | 208.2 | |||||||||
| Additional long-term borrowings | 576.8 | — | |||||||||
| Repayments of long-term debt and finance leases | (558.3) | (305.2) | |||||||||
| Dividends paid | (216.0) | (207.1) | |||||||||
| Share repurchases | (453.6) | (107.5) | |||||||||
| Net (tax withholding) proceeds related to stock-based compensation | (12.7) | (8.2) | |||||||||
| Payments for settlement of fair value hedges | (13.5) | — | |||||||||
| Other | (.3) | — | |||||||||
| Net cash used in financing activities | (195.6) | (419.8) | |||||||||
| Effect of foreign currency translation on cash balances | 2.8 | (.6) | |||||||||
| Increase (decrease) in cash and cash equivalents | 207.2 | (2.3) | |||||||||
| Cash and cash equivalents, beginning of year | 329.1 | 215.0 | |||||||||
| Cash and cash equivalents, end of period | $ | 536.3 | $ | 212.7 |
See Notes to Unaudited Condensed Consolidated Financial Statements
Avery Dennison Corporation
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. General
The unaudited Condensed Consolidated Financial Statements and related notes in this Quarterly Report on Form 10-Q are presented as permitted by Article 10 of Regulation S-X and do not contain certain information included in the audited Consolidated Financial Statements and related notes in our 2024 Annual Report on Form 10-K, which should be read in conjunction with this report. These unaudited Condensed Consolidated Financial Statements contain all adjustments of a normal and recurring nature necessary for a fair statement of our interim results. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or any future period. These unaudited Condensed Consolidated Financial Statements reflect our current estimates and assumptions affecting (i) our reported amounts of assets and liabilities and related disclosures as of the date of the financial statements and (ii) our reported amounts of sales and expenses during the reporting periods presented.
Fiscal Periods
The three and nine months ended September 27, 2025 and September 28, 2024 each consisted of thirteen- and thirty-nine-week periods, respectively.
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.
Reclassifications
Certain prior-period amounts have been reclassified to conform to the current-year presentation. Refer to Note 11, “Segment and Disaggregated Revenue Information,” to the unaudited Condensed Consolidated Financial Statements for more information.
Accounting Guidance Update
In the first quarter of 2025, we adopted guidance related to the accounting for and disclosure of crypto assets. The impact of our adoption of this guidance was not material to our financial statements or disclosures.
Note 2. Goodwill and Other Intangibles Resulting from Business Acquisitions
Changes in the net carrying amount of goodwill for the nine months ended September 27, 2025 by reportable segment are shown below.
| (In millions) | Materials Group | Solutions Group | Total | ||||||||||||||||||||
| Goodwill as of December 28, 2024 | $ | 606.1 | $ | 1,370.1 | $ | 1,976.2 | |||||||||||||||||
| Translation adjustments | 38.1 | 15.2 | 53.3 | ||||||||||||||||||||
| Goodwill as of September 27, 2025 | $ | 644.2 | $ | 1,385.3 | $ | 2,029.5 |
Amortization expense for finite-lived intangible assets resulting from business acquisitions was $22.2 million and $22.3 million for the three months ended September 27, 2025 and September 28, 2024, respectively, and $66.4 million and $67.0 million for the nine months ended September 27, 2025 and September 28, 2024, respectively.
Estimated future amortization expense related to existing finite-lived intangible assets for the remainder of fiscal year 2025 and for each of the next four fiscal years and thereafter is shown below.
| (In millions) | Estimated Amortization Expense | ||||
| 2025 (remainder of year) | $ | 22.2 | |||
| 2026 | 86.0 | ||||
| 2027 | 85.6 | ||||
| 2028 | 77.8 | ||||
| 2029 | 62.4 | ||||
| 2030 and thereafter | 204.4 |
Avery Dennison Corporation
Note 3. Debt
In the first quarter of 2025, we repaid our €500 million of senior notes at maturity using the net proceeds from the €500 million of senior notes we issued in the fourth quarter of 2024, cash flows from operations and commercial paper borrowings.
In the second quarter of 2025, we repaid our $25 million of medium-term notes at maturity using cash flows from operations and commercial paper borrowings.
In the third quarter of 2025, we repaid our $5 million of medium-term notes at maturity using cash flows from operations and commercial paper borrowings.
In September 2025, we issued €500 million of senior notes, due September 11, 2035, which bear an interest rate of 4.000% per year, payable annually in arrears. Our net proceeds from this issuance, after deducting underwriting discounts and offering expenses, were approximately €494 million ($577 million), which we intend to use for general corporate purposes, including to finance acquisitions and repay existing indebtedness under our commercial paper program. Refer to Note 14, “Subsequent Events,” to the unaudited Condensed Consolidated Financial Statements for more information regarding our acquisition of W.F. Taylor Holdings, Inc.
In September 2025, we entered into foreign currency forward contracts that we designated as fair value hedges to hedge the principal balance of our €500 million of senior notes due in 2035 that offset changes in the fair value of the hedged item attributable to foreign currency risk.
During 2024, we entered into foreign currency forward contracts that we designated as fair value hedges to hedge a portion of the principal balance of our euro-denominated debt that offset changes in the fair value of the hedged item attributable to foreign currency risk. These foreign currency forward contracts related to our €500 million of senior notes that matured in the first quarter of 2025 and were settled at that time.
Refer to Note 5, “Financial Instruments,” to the unaudited Condensed Consolidated Financial Statements for more information.
The estimated fair value of our long-term debt is primarily based on the credit spread above U.S. Treasury securities or euro government bond securities, as applicable, on notes with similar rates, credit ratings and remaining maturities. The fair value of short-term borrowings, which include commercial paper issuances and short-term lines of credit, approximates their carrying value given the short duration of these obligations. The fair value of our total debt was $3.71 billion at September 27, 2025 and $3.01 billion at December 28, 2024. Fair value was determined based primarily on Level 2 inputs, which are inputs other than quoted prices in active markets that are either directly or indirectly observable.
Our $1.20 billion revolving credit facility (the “Revolver”) contains a financial covenant requiring that we maintain a specified ratio of total debt minus unrestricted cash and cash equivalents in excess of $50 million to a certain measure of income. As of both September 27, 2025 and December 28, 2024, we were in compliance with this financial covenant. No balance was outstanding under the Revolver as of September 27, 2025 or December 28, 2024.
Note 4. Cost Reduction Actions
2025 Actions
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.
During the nine months ended September 27, 2025, restructuring charges and payments were as follows:
| (In millions) | Accrual at December 28, 2024 | Charges, Net of Reversals | Cash Payments | Non-cash Impairment | Foreign Currency Translation | Accrual at September 27, 2025 | |||||||||||||||||||||||||||||
| 2025 Actions | |||||||||||||||||||||||||||||||||||
| Severance and related costs | $ | 10.0 | $ | 20.1 | $ | (27.1) | $ | — | $ | — | $ | 3.0 | |||||||||||||||||||||||
| Asset impairment charges | — | 1.7 | — | (1.7) | — | — | |||||||||||||||||||||||||||||
| Lease cancellation charges | — | 1.0 | (1.0) | — | — | — | |||||||||||||||||||||||||||||
| Total | $ | 10.0 | $ | 22.8 | $ | (28.1) | $ | (1.7) | $ | — | $ | 3.0 |
Accruals for severance and related costs, as well as lease cancellation charges, were included in “Other current liabilities” and “Long-term retirement benefits and other liabilities” in the unaudited Condensed Consolidated Balance Sheets. Asset impairment charges were based on the estimated market value of the assets, less selling costs, if applicable. Restructuring charges were included in “Other expense (income), net” in the unaudited Condensed Consolidated Statements of Income.
Avery Dennison Corporation
The table below shows the amount of restructuring charges, net of reversals, incurred by reportable segment and Corporate.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Restructuring charges, net of reversals, by reportable segment and Corporate | |||||||||||||||||||||||
| Materials Group | $ | 4.5 | $ | 1.5 | $ | 9.5 | $ | 5.6 | |||||||||||||||
| Solutions Group | 5.2 | 10.9 | 12.4 | 19.7 | |||||||||||||||||||
| Corporate | .1 | — | .8 | .3 | |||||||||||||||||||
| Total | $ | 9.8 | $ | 12.4 | $ | 22.7 | $ | 25.6 |
Note 5. Financial Instruments
We use various derivative financial instruments to manage risks in foreign currency exchange rates, commodity prices and interest rates. We recognize derivative financial instruments as either assets or liabilities at fair value in the unaudited Condensed Consolidated Balance Sheets. Refer to Note 9, “Fair Value Measurements,” to the unaudited Condensed Consolidated Financial Statements for more information.
Fair Value Hedges
In the third quarter of 2025, we entered into foreign currency forward contracts to hedge a portion of the principal balance of our €500 million of senior notes due in the third quarter of 2035. During 2024, we entered into foreign currency forward contracts to hedge a portion of the principal balance of our €500 million of senior notes that matured in the first quarter of 2025 and €500 million of senior notes due in the fourth quarter of 2034. We enter into these contracts to offset changes in the fair value of the hedged item attributable to foreign currency risk. The foreign currency forward contracts hedging our €500 million of senior notes due in the third quarter of 2035 and €500 million of senior notes due in the fourth quarter of 2034 mature in September 2026 and December 2025, respectively.
Refer to Note 3, “Debt,” to the unaudited Condensed Consolidated Financial Statements for more information.
Cash Flow Hedges
During 2020, we entered into U.S. dollar to euro cross-currency swap contracts to effectively convert our fixed-rate U.S. dollar-denominated debt to euro-denominated debt, including semiannual interest payments and the payment of principal at maturity. During the term of the contracts, which end on April 30, 2030, we pay fixed-rate interest in euros and receive fixed-rate interest in U.S. dollars.
We designate commodity forward contracts on forecasted purchases of commodities as cash flow hedges. The impact of these commodity hedge activities on the unaudited Condensed Consolidated Financial Statements was not material.
Net Investment Hedges
In the third quarter of 2025 and during 2024, we entered into foreign currency forward contracts and zero-cost collars, combining each pair as net investment hedges for accounting purposes, to minimize the effect of foreign currency exchange rates on our net investment in certain foreign operations between the sold put strike and the bought call strike rates of the contracts. The notional amount of both hedges was €500 million at September 27, 2025, and they mature in September 2026 and December 2025, respectively.
Other Derivatives
We enter into foreign currency exchange contracts to reduce the risk from foreign currency exchange rate fluctuations associated with our receivables, payables, loans and firm commitments denominated in certain foreign currencies that arise primarily as a result of our operations outside the U.S. The impact of these foreign currency exchange contracts on the unaudited Condensed Consolidated Financial Statements was not material.
Avery Dennison Corporation
The following table shows the fair value and balance sheet locations of our fair value hedges, cross-currency swap contracts designated as cash flow hedges and net investment hedges as of September 27, 2025 and December 28, 2024:
| (In millions) | Notional Amount | Other Current Assets | Other Non-Current Assets | Other Current Liabilities | Other Non-Current Liabilities | Type of Hedge | ||||||||||||||||||||||||||||||||
| September 27, 2025 | ||||||||||||||||||||||||||||||||||||||
| Derivatives designated as hedges: | ||||||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | 1,167.4 | $ | 29.7 | $ | — | $ | .3 | $ | — | Fair value | |||||||||||||||||||||||||||
| Cross-currency swap contracts | 250.0 | — | — | — | 11.8 | Cash flow | ||||||||||||||||||||||||||||||||
| Foreign currency forward contracts with collars | 1,167.4 | — | — | 20.3 | — | Net investment | ||||||||||||||||||||||||||||||||
| Total | $ | 29.7 | $ | — | $ | 20.6 | $ | 11.8 | ||||||||||||||||||||||||||||||
| December 28, 2024 | ||||||||||||||||||||||||||||||||||||||
| Derivatives designated as hedges: | ||||||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | 958.9 | $ | .2 | $ | — | $ | 36.7 | $ | — | Fair value | |||||||||||||||||||||||||||
| Cross-currency swap contracts | 250.0 | — | 10.9 | — | — | Cash flow | ||||||||||||||||||||||||||||||||
| Foreign currency forward contracts with collars | 958.9 | 17.8 | — | .2 | — | Net investment | ||||||||||||||||||||||||||||||||
| Total | $ | 18.0 | $ | 10.9 | $ | 36.9 | $ | — |
The following table shows the components of net gains (losses) recognized in income related to derivative instruments:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Gain (loss) on derivatives designated as fair value hedges: | ||||||||||||||||||||||||||
| Foreign currency forward contracts - Marketing, general and administrative expense | $ | (2.5) | $ | 1.9 | $ | 63.8 | $ | 1.9 | ||||||||||||||||||
The impact of the hedged items associated with the derivative in the table above is recorded to the same income statement line as the derivative instrument. The net gains (losses) recognized in income related to our cross-currency swap contracts were not material to the unaudited Condensed Consolidated Statements of Income for the three or nine months ended September 27, 2025 and September 28, 2024.
The loss recognized in translation for the net investment hedges was $5.8 million and $40.9 million for the three and nine months ended September 27, 2025, respectively, and $1.1 million for both the three and nine months ended September 28, 2024.
Note 6. Taxes Based on Income
The following table summarizes our income before taxes, provision for income taxes, and effective tax rate:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (Dollars in millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Income before taxes | $ | 234.8 | $ | 239.3 | $ | 717.3 | $ | 712.1 | |||||||||||||||
| Provision for income taxes | 68.5 | 57.6 | 195.7 | 181.2 | |||||||||||||||||||
| Effective tax rate | 29.2 | % | 24.1 | % | 27.3 | % | 25.4 | % |
Our provision for income taxes for the three and nine months ended September 27, 2025 included $5.6 million and $14.0 million, respectively, of net tax charge related to the tax on global intangible low-taxed income (“GILTI”) of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from foreign-derived intangible income (“FDII”). Our provision for income taxes for these periods was also negatively affected by the recognition of uncertain tax positions in certain foreign jurisdictions. In addition, our provision for income taxes for these periods included a discrete benefit from a favorable ruling related to deductibility of interest expense in a foreign jurisdiction.
Avery Dennison Corporation
During the third quarter of 2025, we decided to further appeal the court decision denying our application of incentive tax rates in a foreign jurisdiction for the 2016-2019 tax years. We do not expect the final resolution of this matter, even if unfavorable, to have an adverse impact on our provision for income taxes or cash flows as taxes were previously paid at regular tax rates.
On July 4, 2025, the U.S. legislation, commonly referred to as the One Big Beautiful Bill Act, was signed into law. We do not expect this legislation to have a material impact on our financial statements or disclosures in 2025. We will continue to monitor additional guidance from the Internal Revenue Service (“IRS”).
Our provision for income taxes for the three and nine months ended September 28, 2024 included $3.4 million and $11.7 million, respectively, of net tax charge related to the tax on GILTI of our foreign subsidiaries and the recognition of foreign withholding taxes on current year earnings, partially offset by the benefit from FDII. Our provision for income taxes for these periods also included the following discrete items: (i) net benefits primarily from decreases in certain tax reserves, including interest and penalties, as a result of closing tax years and the settlement of a foreign tax audit; (ii) the return-to-provision benefit upon completion of our 2023 U.S. federal income tax return; and (iii) excess tax benefits associated with stock-based payments.
The amount of income taxes we pay is subject to ongoing audits by taxing jurisdictions around the world. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts and circumstances existing at the time. We believe that we have adequately provided for reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate. The final determination of tax audits and any related legal proceedings could materially differ from the amounts currently reflected in our tax provision for income taxes and the related liabilities. We and our U.S. subsidiaries have completed the IRS Compliance Assurance Process through 2022. With limited exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2010.
It is reasonably possible that, during the next 12 months, we may realize a net decrease in our uncertain tax positions, including interest and penalties, of approximately $4 million, primarily as a result of closing tax years.
Note 7. Net Income Per Common Share
Net income per common share was computed as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions, except per share amounts) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| (A)Net income | $ | 166.3 | $ | 181.7 | $ | 521.6 | $ | 530.9 | |||||||||||||||
| (B)Weighted average number of common shares outstanding | 77.9 | 80.5 | 78.5 | 80.5 | |||||||||||||||||||
| Dilutive shares (additional common shares issuable under stock-based awards) | .1 | .3 | .1 | .4 | |||||||||||||||||||
| (C) Weighted average number of common shares outstanding, assuming dilution | 78.0 | 80.8 | 78.6 | 80.9 | |||||||||||||||||||
| Net income per common share: (A) ÷ (B) | $ | 2.13 | $ | 2.26 | $ | 6.64 | $ | 6.60 | |||||||||||||||
| Net income per common share, assuming dilution: (A) ÷ (C) | $ | 2.13 | $ | 2.25 | $ | 6.64 | $ | 6.56 |
Certain stock-based compensation awards were excluded from the computation of net income per common share, assuming dilution, because they would not have had a dilutive effect. Stock-based compensation awards excluded from the computation totaled 0.1 million for the three and nine months ended September 27, 2025 and September 28, 2024.
Avery Dennison Corporation
Note 8. Supplemental Equity and Comprehensive Income Information
Consolidated Changes in Shareholders’ Equity
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Common stock issued, $1 par value per share | $ | 124.1 | $ | 124.1 | $ | 124.1 | $ | 124.1 | |||||||||||||||
| Capital in excess of par value | |||||||||||||||||||||||
| Beginning balance | $ | 821.9 | $ | 833.1 | $ | 840.6 | $ | 854.5 | |||||||||||||||
| Issuance of shares under stock-based compensation plans(1) | 7.7 | 6.7 | (11.0) | (14.7) | |||||||||||||||||||
| Ending balance | $ | 829.6 | $ | 839.8 | $ | 829.6 | $ | 839.8 | |||||||||||||||
| Retained earnings | |||||||||||||||||||||||
| Beginning balance | $ | 5,399.3 | $ | 4,922.2 | $ | 5,151.2 | $ | 4,691.8 | |||||||||||||||
| Cumulative-effect adjustment upon adoption of accounting standard update(2) | — | — | 10.2 | — | |||||||||||||||||||
| Net income | 166.3 | 181.7 | 521.6 | 530.9 | |||||||||||||||||||
| Issuance of shares under stock-based compensation plans(1) | .1 | 3.2 | 12.8 | 7.3 | |||||||||||||||||||
| Contribution of shares to 401(k) plan(1) | 5.7 | 6.5 | 18.5 | 19.8 | |||||||||||||||||||
| Dividends | (73.1) | (70.9) | (216.0) | (207.1) | |||||||||||||||||||
| Ending balance | $ | 5,498.3 | $ | 5,042.7 | $ | 5,498.3 | $ | 5,042.7 | |||||||||||||||
| Treasury stock at cost | |||||||||||||||||||||||
| Beginning balance | $ | (3,693.7) | $ | (3,154.6) | $ | (3,347.5) | $ | (3,134.4) | |||||||||||||||
| Repurchase of shares for treasury | (93.6) | (66.8) | (453.6) | (107.5) | |||||||||||||||||||
| Issuance of shares under stock-based compensation plans(1) | — | 7.1 | 8.3 | 23.4 | |||||||||||||||||||
| Contribution of shares to 401(k) plan(1) | 2.6 | 2.0 | 8.1 | 6.2 | |||||||||||||||||||
| Ending balance | $ | (3,784.7) | $ | (3,212.3) | $ | (3,784.7) | $ | (3,212.3) | |||||||||||||||
| Accumulated other comprehensive loss | |||||||||||||||||||||||
| Beginning balance | $ | (450.0) | $ | (437.7) | $ | (456.1) | $ | (408.1) | |||||||||||||||
| Other comprehensive income (loss), net of tax | (6.3) | 37.3 | (.2) | 7.7 | |||||||||||||||||||
| Ending balance | $ | (456.3) | $ | (400.4) | $ | (456.3) | $ | (400.4) |
(1)We fund a portion of our employee-related costs using shares of our common stock held in treasury. We reduce capital in excess of par value based on the grant date fair value of vesting awards and record net gains or losses associated with using treasury shares to retained earnings.
(2)In the first quarter of 2025, we adopted an accounting guidance update that requires crypto assets to be measured at fair value. This adjustment reflected the difference between the carrying value of our holdings in crypto assets and their fair value as of the beginning of 2025. Crypto assets were not material to the unaudited Condensed Consolidated Financial Statements.
Dividends per common share were as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||
| Dividends per common share | $ | .94 | $ | .88 | $ | 2.76 | $ | 2.57 |
In April 2025, our Board authorized the repurchase of shares of our common stock with a fair market value of up to $750 million, excluding any fees, commissions or other expenses related to such purchases and in addition to the amount outstanding under our previous Board authorization. Board authorizations remain in effect until shares in the amount authorized thereunder have been repurchased.
Avery Dennison Corporation
Changes in Accumulated Other Comprehensive Loss
The changes in “Accumulated other comprehensive loss” (net of tax) for the nine-month period ended September 27, 2025 were as follows:
| (In millions) | Foreign Currency Translation**(1)** | Pension and Other Postretirement Benefits | Cash Flow Hedges | Fair Value Hedges | Total | ||||||||||||||||||||||||
| Balance as of December 28, 2024 | $ | (375.5) | $ | (78.0) | $ | (4.6) | $ | 2.0 | $ | (456.1) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | (1.9) | — | (1.0) | (1.7) | (4.6) | ||||||||||||||||||||||||
| Reclassifications to net income, net of tax | — | 1.5 | 2.9 | — | 4.4 | ||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | (1.9) | 1.5 | 1.9 | (1.7) | (.2) | ||||||||||||||||||||||||
| Balance as of September 27, 2025 | $ | (377.4) | $ | (76.5) | $ | (2.7) | $ | .3 | $ | (456.3) |
(1)Included the impact of our foreign currency forward contracts and zero-cost collars, accounted for as net investment hedges. Refer to Note 5, “Financial Instruments,” to the unaudited Condensed Consolidated Financial Statements for more information.
The changes in “Accumulated other comprehensive loss” (net of tax) for the nine-month period ended September 28, 2024 were as follows:
| (In millions) | Foreign Currency Translation**(1)** | Pension and Other Postretirement Benefits | Cash Flow Hedges | Total | |||||||||||||||||||
| Balance as of December 30, 2023 | $ | (328.6) | $ | (77.5) | $ | (2.0) | $ | (408.1) | |||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | 5.4 | — | — | 5.4 | |||||||||||||||||||
| Reclassifications to net income, net of tax | — | .9 | 1.4 | 2.3 | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | 5.4 | .9 | 1.4 | 7.7 | |||||||||||||||||||
| Balance as of September 28, 2024 | $ | (323.2) | $ | (76.6) | $ | (.6) | $ | (400.4) |
(1)Included the impact of our foreign currency forward contracts and zero-cost collars, accounted for as net investment hedges. Refer to Note 5, “Financial Instruments,” to the unaudited Condensed Consolidated Financial Statements for more information.
Note 9. Fair Value Measurements
Recurring Fair Value Measurements
Assets and liabilities carried at fair value, measured on a recurring basis, as of September 27, 2025 were as follows:
| Fair Value Measurements Using | |||||||||||||||||||||||
| (In millions) | Total | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Investments | $ | 52.6 | $ | 27.2 | $ | 25.4 | $ | — | |||||||||||||||
| Derivative assets | 34.8 | .4 | 34.4 | — | |||||||||||||||||||
| Bank drafts | 7.0 | 7.0 | — | — | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Derivative liabilities | $ | 36.9 | $ | .8 | $ | 36.1 | $ | — | |||||||||||||||
| Contingent consideration liabilities | 2.7 | — | — | 2.7 |
Avery Dennison Corporation
Assets and liabilities carried at fair value, measured on a recurring basis, as of December 28, 2024 were as follows:
| Fair Value Measurements Using | |||||||||||||||||||||||
| (In millions) | Total | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Investments | $ | 48.0 | $ | 24.2 | $ | 23.8 | $ | — | |||||||||||||||
| Derivative assets | 41.2 | .4 | 40.8 | — | |||||||||||||||||||
| Bank drafts | 5.2 | 5.2 | — | — | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Derivative liabilities | $ | 41.5 | $ | .4 | $ | 41.1 | $ | — | |||||||||||||||
| Contingent consideration liabilities | 4.8 | — | — | 4.8 |
Investments include fixed income securities (primarily U.S. government and corporate debt and equity securities) measured at fair value using quoted prices/bids and a money market fund measured at fair value using net asset value. As of September 27, 2025, investments of $1.9 million, $45.4 million and $5.3 million were included in “Cash and cash equivalents,” “Other current assets” and “Other assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. As of December 28, 2024, investments of $1.5 million, $38.1 million and $8.4 million were included in “Cash and cash equivalents,” “Other current assets” and “Other assets,” respectively, in the unaudited Condensed Consolidated Balance Sheets. Derivatives that are exchange-traded are measured at fair value using quoted market prices and classified within Level 1 of the valuation hierarchy. Derivatives measured based on foreign currency exchange rate inputs that are readily available in public markets are classified within Level 2 of the valuation hierarchy. Bank drafts (maturities greater than three months), which are valued at face value due to their short-term nature, were included in “Other current assets” in the unaudited Condensed Consolidated Balance Sheets.
Contingent consideration liabilities as of September 27, 2025 and December 28, 2024 relate to estimated earn-out payments associated with an acquisition completed in 2021, which are subject to the acquired company achieving certain post-acquisition performance targets. These liabilities were recorded based on the expected payments and have been classified within Level 3 of the valuation hierarchy. Activity related to contingent consideration was immaterial for the nine months ended September 27, 2025 and September 28, 2024.
In addition to the investments described above, we hold venture investments that had a total carrying value of approximately $56 million and $45 million as of September 27, 2025 and December 28, 2024, respectively, which was included in “Other assets” in the unaudited Condensed Consolidated Balance Sheets. Starting in the second quarter of 2024, we began revaluing certain investments based on Level 1 inputs; the fair value of these investments was $5.3 million and $8.4 million as of September 27, 2025 and December 28, 2024, respectively. We recognized a net gain of $1.3 million and a net loss of $2.5 million in our venture and other investments for the three months ended September 27, 2025 and September 28, 2024, respectively, and net losses of $14.8 million and $19.7 million for the nine months ended September 27, 2025 and September 28, 2024, respectively. These net gains or losses were recorded in “Other expense (income), net” in the unaudited Condensed Consolidated Statements of Income.
Note 10. Commitments and Contingencies
Legal Proceedings
We are involved in various lawsuits, claims, inquiries and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should we incur liabilities that were not previously accrued. Probable insurance reimbursements are not offset against potential liabilities.
Because of the uncertainties associated with claims resolution and litigation, future expenses to resolve legal proceedings could be higher than the liabilities we have accrued. If information were to become available that allowed us to reasonably estimate an amount higher or lower than what we have accrued in the range of potential expenses determine to be probable, we would adjust our accrued liabilities accordingly. Additional lawsuits, claims, inquiries and other regulatory and compliance matters could arise in the future. The range of expenses for resolving any future matters would be assessed as they arise; until then, a range of potential expenses for their resolution cannot be determined. Based upon current information, we believe that the impact of the resolution of legal proceedings would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows.
Avery Dennison Corporation
Environmental Expenditures
Environmental expenditures are generally expensed. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these matters could affect future results of operations should our exposure be materially different from our estimates or should we incur liabilities that were not previously accrued. Probable insurance reimbursements are not offset against potential liabilities. We review our estimates of the costs of complying with environmental laws related to the remediation and cleanup of various sites, including sites in which governmental agencies have designated us as a potentially responsible party (“PRP”). However, environmental expenditures for newly acquired assets and those that extend or improve the economic useful life of existing assets are capitalized and amortized over the shorter of the estimated useful life of the acquired asset or the remaining life of the existing asset.
As of September 27, 2025, we have been designated by the U.S. Environmental Protection Agency (“EPA”) and/or other responsible state agencies as a PRP at ten waste disposal or waste recycling sites that are the subject of separate investigations or proceedings concerning alleged soil and/or groundwater contamination. No settlement of our liability related to any of these sites has been agreed upon. We are participating with other PRPs at these sites and anticipate that our share of remediation costs will be determined pursuant to agreements that we enter into with the EPA or other governmental authorities.
These estimates could change as a result of changes in planned remedial actions, remediation technologies, site conditions, the estimated time to complete remediation, environmental laws and regulations, and other factors. Because of the uncertainties associated with environmental assessment and remediation activities, our future expenses to remediate these sites could be higher than the liabilities we have accrued. If information were to become available that allowed us to reasonably estimate an amount higher or lower than what we have accrued in the range of potential expenses, we would adjust our environmental liabilities accordingly. In addition, we may be identified as a PRP at additional sites in the future. The range of expenses for remediation of any future-identified sites would be addressed as they arise; until then, a range of expenses for their remediation cannot be determined.
The activity related to our environmental liabilities for the nine months ended September 27, 2025 is shown below.
| (In millions) | |||||
| Balance at December 28, 2024 | $ | 13.0 | |||
| Charges, net of reversals | 2.6 | ||||
| Payments | (3.9) | ||||
| Balance at September 27, 2025 | $ | 11.7 |
Approximately $4 million and $5 million of this balance was classified as short-term and included in “Other current liabilities” in the unaudited Condensed Consolidated Balance Sheets as of September 27, 2025 and December 28, 2024, respectively.
Avery Dennison Corporation
Note 11. Segment and Disaggregated Revenue Information
Disaggregated Revenue Information
Disaggregated revenue information is shown below in the manner that best reflects how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Revenue from our Materials Group reportable segment is attributed to geographic areas based on the location from which products are shipped. Revenue from our Solutions Group reportable segment is shown by product group.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025**(2)** | September 28, 2024 | September 27, 2025**(2)** | September 28, 2024 | |||||||||||||||||||
| Net sales to unaffiliated customers**(1)** | |||||||||||||||||||||||
| Materials Group: | |||||||||||||||||||||||
| North America | $ | 481.6 | $ | 478.1 | $ | 1,468.1 | $ | 1,438.4 | |||||||||||||||
| Europe, the Middle East and North Africa | 520.2 | 498.5 | 1,586.1 | 1,583.1 | |||||||||||||||||||
| Asia Pacific | 391.4 | 396.7 | 1,135.5 | 1,147.5 | |||||||||||||||||||
| Latin America | 122.8 | 124.4 | 356.6 | 372.0 | |||||||||||||||||||
| Total Materials Group | 1,516.0 | 1,497.7 | 4,546.3 | 4,541.0 | |||||||||||||||||||
| Solutions Group: | |||||||||||||||||||||||
| Apparel and other | 464.6 | 464.3 | 1,351.0 | 1,400.7 | |||||||||||||||||||
| Identification Solutions and Vestcom | 234.9 | 221.4 | 687.0 | 628.3 | |||||||||||||||||||
| Total Solutions Group | 699.5 | 685.7 | 2,038.0 | 2,029.0 | |||||||||||||||||||
| Net sales to unaffiliated customers | $ | 2,215.5 | $ | 2,183.4 | $ | 6,584.3 | $ | 6,570.0 | |||||||||||||||
(1)Certain prior-period amounts have been reclassified to conform to the current-year presentation.
(2)Beginning in the first quarter of 2025 and to better align with our growth strategy, revenues for certain radio-frequency identification products were reflected in the Materials Group reportable segment; in prior years, these revenues were reflected in the Solutions Group reportable segment. Prior-year amounts were not material.
Segment Information
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. Segment results and reconciliation to income before taxes are presented below.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Materials Group | |||||||||||||||||||||||
| Net sales to unaffiliated customers | $ | 1,516.0 | $ | 1,497.7 | $ | 4,546.3 | $ | 4,541.0 | |||||||||||||||
| Segment expense(1) | 1,285.9 | 1,275.5 | 3,843.4 | 3,833.8 | |||||||||||||||||||
| Segment adjusted operating income | $ | 230.1 | $ | 222.2 | $ | 702.9 | $ | 707.2 | |||||||||||||||
| Solutions Group | |||||||||||||||||||||||
| Net sales to unaffiliated customers | $ | 699.5 | $ | 685.7 | $ | 2,038.0 | $ | 2,029.0 | |||||||||||||||
| Segment expense(1) | 629.8 | 608.3 | 1,833.1 | 1,820.9 | |||||||||||||||||||
| Segment adjusted operating income | $ | 69.7 | $ | 77.4 | $ | 204.9 | $ | 208.1 |
(1)Segment expense included cost of products sold and marketing, general and administrative expense and excluded other expense (income), net, and other items.
Avery Dennison Corporation
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Segment adjusted operating income | |||||||||||||||||||||||
| Materials Group | $ | 230.1 | $ | 222.2 | $ | 702.9 | $ | 707.2 | |||||||||||||||
| Solutions Group | 69.7 | 77.4 | 204.9 | 208.1 | |||||||||||||||||||
| Total | 299.8 | 299.6 | 907.8 | 915.3 | |||||||||||||||||||
| Corporate expense | (18.7) | (19.9) | (65.5) | (73.1) | |||||||||||||||||||
| Other expense (income), net and other items | (16.7) | (15.3) | (37.1) | (61.6) | |||||||||||||||||||
| Interest expense | (33.3) | (30.0) | (98.2) | (87.8) | |||||||||||||||||||
| Other non-operating expense (income), net | 3.7 | 4.9 | 10.3 | 19.3 | |||||||||||||||||||
| Income before taxes | $ | 234.8 | $ | 239.3 | $ | 717.3 | $ | 712.1 |
Additional Segment Information
Additional financial information by reportable segment is shown below.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Intersegment sales | |||||||||||||||||||||||
| Materials Group | $ | 45.4 | $ | 37.8 | $ | 135.3 | $ | 123.1 | |||||||||||||||
| Solutions Group | 12.2 | 12.3 | 37.9 | 38.6 | |||||||||||||||||||
| Intersegment sales | $ | 57.6 | $ | 50.1 | $ | 173.2 | $ | 161.7 | |||||||||||||||
| Capital expenditures**(1)(2)** | |||||||||||||||||||||||
| Materials Group | $ | 19.3 | $ | 19.4 | $ | 51.3 | $ | 61.1 | |||||||||||||||
| Solutions Group | 14.8 | 25.3 | 49.8 | 78.5 | |||||||||||||||||||
| Capital expenditures | $ | 34.1 | $ | 44.7 | $ | 101.1 | $ | 139.6 | |||||||||||||||
| Depreciation and amortization expense**(1)** | |||||||||||||||||||||||
| Materials Group | $ | 34.8 | $ | 33.1 | $ | 99.3 | $ | 98.7 | |||||||||||||||
| Solutions Group | 49.2 | 45.0 | 143.4 | 135.3 | |||||||||||||||||||
| Depreciation and amortization expense | $ | 84.0 | $ | 78.1 | $ | 242.7 | $ | 234.0 | |||||||||||||||
(1)Corporate capital expenditures and depreciation and amortization expense are allocated to our reportable segments based on their percentage of consolidated net sales.
(2)Capital expenditures for property, plant and equipment included accruals.
Avery Dennison Corporation
Other expense (income), net, by type was as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||
| Other expense (income), net, by type | |||||||||||||||||||||||
| Restructuring charges, net of reversals: | |||||||||||||||||||||||
| Severance and related costs, net of reversals | $ | 7.5 | $ | 11.0 | $ | 20.1 | $ | 22.2 | |||||||||||||||
| Asset impairment and lease cancellation charges | 2.3 | 1.4 | 2.6 | 3.4 | |||||||||||||||||||
| Other items: | |||||||||||||||||||||||
| Outcomes of legal matters and settlements, net | 4.7 | — | 4.7 | (6.5) | |||||||||||||||||||
| Transaction and related costs | 2.0 | — | 2.0 | .3 | |||||||||||||||||||
| Losses from Argentine peso remeasurement and Blue Chip Swap transactions | 1.9 | .4 | 4.4 | 15.8 | |||||||||||||||||||
| (Gain) loss on venture and other investments | (1.3) | 2.5 | 14.8 | 19.7 | |||||||||||||||||||
| (Gain) loss on sales of assets | (.4) | — | (11.5) | — | |||||||||||||||||||
| Other expense (income), net | $ | 16.7 | $ | 15.3 | $ | 37.1 | $ | 54.9 | |||||||||||||||
Note 12. Supplemental Financial Information
Inventories
The table below summarizes amounts in inventories.
| (In millions) | September 27, 2025 | December 28, 2024 | |||||||||
| Raw materials | $ | 421.0 | $ | 435.0 | |||||||
| Work-in-progress | 244.3 | 224.9 | |||||||||
| Finished goods | 372.1 | 318.2 | |||||||||
| Inventories | $ | 1,037.4 | $ | 978.1 |
Property, Plant and Equipment, Net
The table below summarizes the amounts in property, plant and equipment, net.
| (In millions) | September 27, 2025 | December 28, 2024 | |||||||||
| Property, plant and equipment | $ | 4,208.0 | $ | 3,993.5 | |||||||
| Accumulated depreciation | (2,628.1) | (2,406.8) | |||||||||
| Property, plant and equipment, net | $ | 1,579.9 | $ | 1,586.7 |
Allowance for Credit Losses
The activity related to our allowance for credit losses is shown below.
| Nine Months Ended | |||||||||||
| (In millions) | September 27, 2025 | September 28, 2024 | |||||||||
| Beginning balance | $ | 29.0 | $ | 34.4 | |||||||
| Provision for credit losses | 2.0 | 6.7 | |||||||||
| Amounts written off | (3.1) | (4.1) | |||||||||
| Other, including foreign currency translation | 1.7 | .1 | |||||||||
| Ending balance | $ | 29.6 | $ | 37.1 |
Avery Dennison Corporation
Supplier Finance Programs
We have agreements with third-party financial institutions to facilitate payments to suppliers. These third-party financial institutions offer voluntary supply chain finance programs that enable certain of our suppliers, at the supplier’s sole discretion, to sell our payment obligations to a financial institution on terms directly negotiated with the financial institution. Participating suppliers decide which payment obligations are sold to the financial institution and we have no economic interest in a supplier’s decision to sell these payment obligations. We make payments to the financial institution on the invoice due date, regardless of whether an individual invoice is sold by the supplier to the financial institution. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers' decisions to sell amounts under these arrangements. Amounts due under our supply chain finance programs were included in accounts payable in our unaudited Condensed Consolidated Balance Sheets and activities related to these programs were presented as operating activities in our unaudited Condensed Consolidated Statements of Cash Flows. As of September 27, 2025 and December 28, 2024, the amounts due to financial institutions for suppliers that participate in these programs were $397.8 million and $384.6 million, respectively.
Argentine Blue Chip Swap
During 2019, the Argentine government instituted exchange controls restricting the ability of entities and individuals to exchange Argentine pesos for foreign currencies or remit foreign currency out of Argentina. Due to these currency exchange restrictions, markets in Argentina use a legal trading mechanism known as the Blue Chip Swap that allows entities to transfer U.S. dollars in and out of Argentina. During the nine months ended September 28, 2024, we entered into Blue Chip Swap transactions that resulted in losses of approximately $10 million that we recorded in “Other expense (income), net” in the unaudited Condensed Consolidated Statements of Income. Purchases and the proceeds from sales of Argentine Blue Chip Swap securities were included in investing activities in our unaudited Condensed Consolidated Statements of Cash Flows.
Note 13. Recent Accounting Requirements
In September 2025, the Financial Accounting Standards Board issued guidance changing the capitalization criteria for internal-use software, eliminating references to project stages and requiring that projects meet completion probability before costs can be capitalized. This guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. We are currently assessing the impact of this guidance on our consolidated financial statements.
Note 14 . Subsequent Events
On October 20, 2025, we completed our business acquisition of W.F. Taylor Holdings, Inc., a Georgia-based flooring adhesives business, for the purchase price of $390 million. This acquisition is expected to expand the product portfolio in our Materials Group reportable segment. We funded this acquisition using a combination of cash and proceeds from an issuance of senior notes in September 2025. Refer to Note 3,“Debt,” to the unaudited Condensed Consolidated Financial Statements for more information.
Avery Dennison Corporation
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