Tags: Avery | Dennison | innovation | AVY

Avery Dennison Looks to Innovation

By    |   Tuesday, 06 Dec 2011 03:23 PM

The past two quarters haven’t been easy for Avery Dennison (AVY), a world leader in adhesives and labeling, but the company expects its product innovation to keep it ahead of the curve until sales improve.

In mid-November, Avery opened its new 24,500-square-foot Adhesives Center of Excellence research center in Mill Hall, Pa., which will be its main R&D headquarters as well as main adhesives manufacturing center.

During the second quarter the company launched no less than 16 new products, and a recent joint venture with Martha Stewart Living Omnimedia (MSO) and Staples (SPLS) for a line of home organization products means new products coming during the fourth quarter and first quarter of 2012.

Despite being a developer and manufacturer of physical labeling, AVY is not leaving the Internet behind. It has recently teamed with Plaxo, creators of an easy-to-use online address book, to create contact mailing labels quickly and easily.

The company also recently announced it would expand its market placement in Russia, focusing on high definition heat transfers for garment embellishment, enhanced RFID systems, and Greenprint, an analysis tool to facilitate sustainable packaging development.

European sales may be slow. The CEO recently said that sales improvement in the region during the next quarter would be marginal at best, but that Russia is bucking the trend.

Soft outlook

During AVY’s third quarter conference call in late October, the company said it expected the softer sales trend to continue through the fourth quarter, though it had hopes there would be a rebound in early 2012.

Despite weaker sales, the company still has a five-year average revenue growth rate of 3.54 percent.

In the same breath, it lowered full year guidance, which hit investor outlook as Credit Suisse lowered its price guidance to $34 and held its neutral rating on the company. Recent trading has been around $24.

Total organic net sales for the third quarter were down 2 percent while net income was down 22 percent.

Avery next reports on Feb. 22.

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The past two quarters haven t been easy for Avery Dennison (AVY), a world leader in adhesives and labeling, but the company expects its product innovation to keep it ahead of the curve until sales improve. In mid-November, Avery opened its new 24,500-square-foot Adhesives...
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2011-23-06
Tuesday, 06 Dec 2011 03:23 PM
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