Avery Dennison Corp. shares fell more than 12 percent Tuesday morning, a day after the label maker warned that it expects to report second quarter and full year earnings below Wall Street expectations.
The Pasadena company, which is scheduled to report earnings on July 26, said late Monday that it expects quarterly GAAP net income of 64 to 69 cents per share, with adjusted earnings between 74 and 79 cents. Sales are expected to total $1.7 billion, lower than a year ago by 2 percent. Analysts surveyed by Thomson Reuters were expecting the company to report adjusted per-share profit of 88 cents on revenue of $1.83 billion.
Chief Executive Dean Scarborough said that sales volume in the company’s two largest segments – pressure-sensitive materials and retail branding products – were hurt as consumer goods and apparel companies “became more cautious about consumer sentiment and the impact of rising retail prices to offset inflation.”
For the full year, the company now expects adjusted profit of $2.45 to $2.75 per share, down from an earlier estimate of $3 to $3.30. Annual net sales are expected to range between $6.8 billion and $6.9 billion.
The Wall Street consensus was for adjusted profit of $3.04 per share on revenue of almost $7.1 billion.
Shares were down $4.63, or more than 12 percent, to $33.18 in midday trading on the New York Stock Exchange.
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