Avery Dennison Corp.'s (AVY) second-quarter profit sank 13% as
lower volumes in its two largest segments dragged on revenue.
The office-supply manufacturer said last week that decreased
volumes would hurt its second-quarter results after
lower-than-expected sales in its pressure-sensitive materials and
retail branding segments. At the same time, inflation has hurt the
company in recent months as rising raw materials costs trim its
margins.
"We are taking action to reduce costs and increase productivity
through this slowdown, and we expect to regain momentum when market
conditions improve," Chairman and Chief Executive Dean Scarborough
said Tuesday.
Avery has also said it is responding with some price increases
but remains cautious about consumers' reactions to the moves.
The company reported a second-quarter profit of $73.3 million,
or 69 cents a share, down from $83.8 million, or 78 cents a share,
a year earlier. Excluding restructuring costs and other charges,
per-share earnings were 78 cents, down from 94 cents. Revenue grew
2.7% to $1.73 billion but fell about 2% on an organic basis.
The company last week predicted per-share earnings between 74
cents and 79 cents on revenue of $1.7 billion, well below analysts
expectations at the time.
Gross margin narrowed to 27.3% from 29.2% on higher costs and
slower revenue growth.
Shares closed at $33.34 Monday and were mostly inactive
premarket. The stock is off 21% this year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com