Avery Dennison (AVY) Q2 2026 earnings call transcript

I would now like to turn the call over to William Gill Christ, Avery Denison's Vice President of Investor Relations. Please go ahead, sir.

Thank you, Ellen, and welcome to Avery Denison's second quarter, 2026, Earnings Conference Call. Please note that throughout today's discussion, we'll be making references to non-GAP financial measures. The non-GAP measures that we use are defined, qualified, and reconciled from GAP on schedules A4 to A8 for the financial statements accompanying today's earnings release. Remind you that we'll make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These four looking statements are made subject to the Safe Harbor statement included in today's earnings release. On my call today are Dion Standard, President and Chief Executive Officer, and Greg Lubbins, Senior Vice President and Chief Financial Officer. I'll now turn the call over to Dion.

Thanks, Gillian. Good morning, everyone. We delivered strong second quarter results across the board. On a Euro-by-year basis, organic sales growth accelerated to 8 percent, adjusted EBITDA margins expanded, adjusted EPS grew by 19 percent, and adjusted free cash flow generation was strong at more than $360 million. While these results benefited from continued customer inventory stocking materials group, excluding this tailwind, we continued to drive a step change in the pace of our sales and earnings growth. Our performance this quarter once again demonstrated the strength and the resilience of our portfolio. Sales growth was balanced across both base and high value categories, with high value categories returning to mid-single digit growth as we expected. Combining this improved organic growth with our commercial and operational excellence allowed us to expand adjusted EBITDA margins across both segments, even against a volatile and inflationary cost backdrop.

Our priorities are clear. We are continuing to drive both earnings growth and business resiliency by leaning into our proven playbook. First, we're investing in innovation and service-led differentiation to drive share gains and expand new business opportunities. The strength of this focus was evident in our second quarter performance where organic sales growth accelerated.

Second, executing commercial and operational agility, including productivity and pricing actions to mitigate inflationary pressures. And third, generating strong free cash flow and maintaining a healthy balance sheet. Our balance sheet strength and robust cash generation supported the increased pace of our share repurchases during the quarter and another increase in our dividend while continuing to invest in our long-term growth priorities.

Turning to our segment results, materials group delivered organic sales growth of approximately 10% driven by high single-digit volume mixed growth, as well as low single-digit pricing realisation as we began to pass on cost inflation. During the quarter, the business delivered solid performance across both base and high value categories. Encouraging the high value categories grew mid-single-digits year over year, led by specialty and durable labels, as well as intelligent labels. Base categories grew low double digits driven by underlying market growth, continued share gains and the benefit of customer pre-buy. In label materials, customer pre-buying persisted longer into the quarter than we initially anticipated. Driven by accelerating raw material inflation, as well as customer concerns regarding surety of supply, particularly in Europe and parts of Asia.

Looking forward, while it is difficult to predict the timing of when the unwind will happen due to continued geopolitical uncertainty, we anticipate the majority of the unwind in the third quarter with a smaller carryover into Q4. From a profitability perspective, materials group adjusted EBITDA was strong, growing high teams of minds and expanding compared to prior year. In the solutions group, organic sales group 3%. The quarter was characterized by solid low-single-digit growth across both our high value categories and base solutions. Within our high value platforms, in Bellux delivered robust low-double-digit growth, driven by core market expansion and strong World Cup demand. Intelligent labels grew low-single digits, while Vescom was down slightly as we lapped a major customer rollout from 2025.

In our base solutions, we were pleased to see sales return to low-single-digit growth. From a profitability perspective, execution and our productivity playbook more than offset higher employee-related costs. This allowed us to deliver strong EBITDA margin expansion, pivoting to our enterprise-wide intelligent labels platform. Sales were up low-single digits compared to prior year, in line with our growth expectations for the quarter. As anticipated, this headline number reflects varying dynamics across our major and markets. In our largest category, apparel and general retail, we delivered another quarter of strong performance with sales up approximately 10%. This growth was driven by continued program expansions in apparel alongside a solid recovery in general retail. Conversely, we experienced a headwind of logistics where sales were down double digits.

This was driven by the difficult comparison of lapping outside share gains from 2025 and softer overall customer demand in the segment. Looking ahead, we continued to expect a 2026 growth for our enterprise-intelligent labels platform to outpace 2025. In apparel and general retail, we expected to live a strong full-year growth as adoption continues to deepen. In food, we are positioning the platform for an acceleration in the back half of the year, driven by the beginning of the rollout with the largest US grosser retailer and expanding activity across other customers.

Finally, logistics, we are managing through the normalization of upsize volume share gains from 2025 with the largest partner while continuing to expand pilots with new logistics customers. As to our outlook, we are returning to providing full-year guidance, reflecting our team's strong execution through a dynamic environment and the challenges of precisely timing the second half customer inventory de-stocking and materials group. For the full year of 2026, we anticipate $10 to $10.30 in adjusted earnings per share on organic sales growth of 3 to 4%.

In summary, our strong second quarter performance, delivering another quarter of accelerating sales and earnings growth, highlights the differentiation underlying strength of our enterprise. We remain focused on the key secular tell when shaping our long-term strategy while continuing to execute the operational actions required to navigate cyclical dynamics and inflationary shifts with agility. The proactive steps we are taking to accelerate innovation and differentiation serve our customers and ensure supply chain resilience further strengthens our competitive moat. Our proven strategies, market leading resilient businesses, agile teams and disciplined capital allocation approach give us confidence in our ability to deliver sustainable growth in 2026 and beyond. I am proud of the global Avery Denison team, their agility and operational execution continue to drive strong results.

Giving us momentum as we execute across the balance of 2026 and beyond. Now, over to you, Greg.

Thanks, Dion. Hello, everybody. In the second quarter, we delivered strong adjusted earnings per share of $2.89 up at 19% compared to prior year. Earnings growth was driven by higher volume and productivity, partially offset by higher employee related costs and targeted growth investments.

As Dion mentioned, customer inventory prebys were contributing factor during the quarter, adding an estimated 25 cents to earnings. Second quarter reported sales were up 11% year over year with organic sales growth of 8% driven by strong volume mix and slightly favorable pricing.

We estimate that roughly half of the organic growth was from customer pre-buy activity. Reported sales also benefited from approximately two points of growth from foreign currency translation and a point of growth from the tailored uses acquisition. Adjusted EBITDA margin was 17.1% in the quarter of 50 basis points compared to prior year. And we generated strong adjusted free cash flow of $365 million in the quarter, primarily driven by earnings growth and working capital improvements. Our balance sheet remained strong with a quarter end net debt to adjusted EBITDA ratio of 2.3 times. Capital allocation during the second quarter remained consistent with our established framework. We returned over $210 million to shareholders through a balanced combination of $76 million in dividends and $138 million in share repurchases, an accelerated pace relative to the first quarter.

This brings our year to date capital return to shareholders to roughly $350 million. These actions underscore our ongoing commitment to discipline capital deployment while preserving our financial flexibility. Turning to segment results for the quarter, materials group organic sales were very strong, coming in 10% higher than prior year, driven by high single digit volume mixed growth. Excluding our estimate of the year over year benefit from customer pre-vise, underlying organic sales go through main strong at mid-single digits.

Turning to label materials similar to the first quarter, we believe we successfully gained share and realized favorable year over year pricing as we acted to mitigate the impact of rising raw material cost. From a regional perspective compared to prior year, volume mixed in North America was up mid-single digits. Europe delivered strong mid-teens growth in an emerging market, both Asia and Latin America grew high single digits. Organic growth across our materials group high value categories grew mid-single digits, led by low double digit growth in specialty and durable labels, and high single digit growth in intelligent labels.

Industrial tapes grew lower single digits and graphics and reflective sales were comparable to prior year. Materials group adjusted EBITDA was up 17% compared to prior year, with margins up 20 basis points. This margin expansion reflects strong volume, ongoing productivity actions, and the net benefits from pricing and raw material cost inclusive of cost out reengineering.

These factors more than offset an unfavorable product mix and higher employee related costs. Regarding raw material cost, we experienced mid-single digit year over year raw material inflation in the second quarter, representing high single digit sequential inflation, slightly above our expectations. Our teams continue to execute our proven playbook to navigate the current inflation environment through strategic sourcing actions, reengineering, and the timely implementation of pricing actions.

Looking ahead for the remainder of the year, while the situation remains uncertain, we're currently anticipating high single digit year over year inflation in the second half.

Shifting to solutions group, organic sales grew up 3% with both high value and base categories, delivering low single digit growth. Within high value categories, envelopes delivered strong, low double digit growth, intelligent labels grew low single digits, with particular strength in apparel and general retail categories, while VSCOM was down low single digits as we laughed at new program rollouts from the prior year. Solutions group adjusted EBITDA margin was 18.6%, expanding 150 basis points a year over year and 220 basis points sequentially.

This margin expansion was driven by continued execution of our productivity initiatives, the reversal of prior year tariff-related network inefficiencies, and a positive net price cost impact inclusive of tariff-related costs. Together, these benefits more than offset higher employee related cost in our targeted investments and growth. Turning now to our full year 2026 outlook, we anticipate reported sales growth of 5% to 6%. This includes organic growth of 3% to 4%, with approximately 1.5% from currency translation, 1% from the tailored heaps of acquisition, and a nearly half point headwind from the fiscal calendar change. We expect full year adjusted earnings per share in the range of $10 to $10.30, representing 7% growth year over year at the midpoint.

This full year earnings growth is driven by benefits of organic growth, which is primarily volume mix driven, a largely neutral impact from customer inventory management for the full year, productivity actions, including restructuring benefits of more than $60 million, offsetting headwinds from age inflation, and the normalization of 2025 temporary savings, which are largely incentive compensation related, in a net benefit of approximately 30 cents from combined currency, share count, interest, and tax. Additionally, we remain committed to strong free cash flow, targeting roughly 100% conversion for the year, which fixed an IT capital spending of approximately $260 million. From a quarterly earnings cadence perspective, we're assuming the third quarter will see a larger than normal sequential earnings decline, driven by our customer de-stocking timing assumption, which will represent an approximate 50 cents sequential headwind versus the benefit we saw in the second quarter.

While we expect a sequential headwind in the second half as these customers pre-bise unwind, underlying earnings momentum remains strong across the balance of the year. In summary, we delivered a strong second quarter, achieving 8% organic sales growth and 19% adjusted earnings growth. We generated very strong free cash flow, increased our dividend, and accelerated share repurchases, while maintaining a strong balance sheet with leverage coming down to 2.3 times. Our updated 2026 outlook anticipates 3 to 4% organic sales growth, and roughly 7% EPS growth, demonstrating positive momentum toward our long-term targets.

Overall, our resilient portfolio, agile execution, and disciplined capital allocation give us high confidence in our ability to deliver strong, long-term value to all stakeholders.

Thanks, Gansham. Our anticipation has always been that we would continue to see our growth, you know, ramp in the second half of the year. And when I look at the individual segments in apparel and general retail, we'll continue to expect solid growth as we go through the second half of the year, largely on the new program rollouts we're doing, as well as the continued strengthening and some of the general retail execution as well. In logistics, specifically, you know, we're expecting a continued share and volume challenge relative to 2025 when we grew outside share and volume in that period. And we expect that to be for the remainder of the year while we continue to also expand pilots with our existing customers that we have and some new customers in the logistics pipeline.

And in food, we're expecting a much more meaningful contribution from the food programs as we go through the second half of the year, largely on the significant retailer rollout that we've talked about for a while, as well as a lot more activity new customer programs overall that we're seeing in the food sector, Gansham.

Yeah, thanks, George. So in one thing we talked about relatively around a point of growth from customer inventory building. I think I mentioned earlier about half of our organic growth in Q2, we would estimate it as related to inventory build. So in total, closer to five points of growth in the first half or added net per half about two and a half percent growth for the whole half of the year. And we would expect to see that come out in the second half, as we said. So I think you would see that change from first half to second half at the same time from an organic growth perspective that will largely be offset in the second half by the fact that we'll have more pricing action versus prior year, where we still have deflation in the first quarter, carryover from last year.

We'll have more pricing impact year over year in the second half. I think to your point, we're seeing that more in Europe and Asia, and that's where we're seeing more of the inflationary pressures as well, as well as just more customer concern, I think, about the majority of supply. And as we move through the second quarter, we continue to see that inflation increase in the middle part of the quarter, and obviously it's been quite up and down since then. So customers are still seeing a pretty uncertain environment. And I think that's what led to a lot of the stock build that continues to happen throughout the second quarter.

Yeah, thanks John for the question. So when we look at the second quarter from a price cost perspective, and I'll talk sequentially, we saw high single digit inflation from Q1 to Q2, and we had mid-single digit price increase from Q1 to Q2 to help mitigate that in addition to, obviously, material engineering and our procurement teams continuing to work to mitigate that as well.

So I think we largely mitigated the majority of that in the second quarter from a sequential perspective. When we looked Q2 to Q3, we would expect low single digit sequential inflation, largely carry over from what we saw as we move through the second quarter. But I will say continues to be a pretty uncertain environment there. So we've seen oil, like I said a minute ago, move up and down quite a bit over the last few weeks. But right now our expectation is low single digit sequential inflation and low single digit sequential price as well, Q2 to Q3.

If I shift to your second question on solutions margins, I think overall there's a couple drivers there. That teams continue to drive pretty significant productivity year over year. Certainly that's having a benefit on our margins there. At the same time as a nice volume rebound, our apparel business was growing mid- to high single digits in the quarter as we left some of the tariff implications from Q2 last year with some strong growth in our Bellos platform, our high value category there that we talked about earlier as well. So overall it's both strong volume growth in apparel as well as productivity across the business. And we did have a couple small one-time type benefits in the quarter, but still strong underline results.

You may see a little bit of moderation in that margin in Q3, but we still expect the second half to be above prior year.

Thanks, Jeff. Let me deal with the first thing, Greg, and take the second. We continued to have very strong conviction in the growth and the food segment as we move forward over the years to come. Because we see the return and investment at the retail level to be so strong in all the pilots that we've done and some of the roll-ups that have been underway for a while. I think the way I characterize Jeff as the initial focus has been really around bakery. It's a more simple one to implement, but we are, as you know, working through protein now, which has been more technically difficult to do, but that's where we've brought our innovation to bear where I think we continue to sustain advantage.

And then beyond protein within, you know, the next category is really at the periphery, the store will be imperishable items, the further perishable items. And I think those will follow in suit. I certainly think that two things are also playing in thematically. So one is, I think, retail at an aggregate level is recognizing that the greater and the urgency of which they digitize their stores overall to drive more of a digital platform for their stores, the more they're likely to succeed in driving the efficiencies and consumer connection they really desire. And clearly, you know, technologies like IL play a very significant role in enabling that driving return on investment both from a labor productivity, a gross margin expansion and sales uplift.

We've seen that consistently, particularly imperishable foods. And so I think the only other thing I'd say from our perspective is, you know, it's an area where we're going to continue to invest the scale of our customers that are now in pilot has continued to expand. Our pipeline has expanded in that regard, includes the number of the US retailers and European retailers, and also some areas very specifically where, for example, DSD deliveries are taking place in certain categories as well.

So we have my conviction it, and I see it as a longer term growth opportunity within our broader high value category portfolio overall.

Yeah, and Jeff, on your second question, I think there's two areas of employee costs where we're seeing a headwind year over year. One is the normal year over year wage inflation that we see across the business. And that's more normal levels of what we've seen in the recent past. I think the other one is the larger one really this year from a year over year perspective is incentive compensation. So last year, clearly, we delivered below our targets incentive comp payouts were well below target levels last year. And this year, we're on track at or above depending on the business to deliver on our target. So there's a relatively sizable incentive compensation headwind. When I look at the overall earnings growth formula kind of year over year, from an order of magnitude perspective, our productivity is basically largely offsetting our wage inflation and our incentive compensation.

So that's roughly the size of those headwinds versus our productivity.

Yes, I think Josh, when you look first half the second half, first half organic growth is around 4.5% on the full first half basis. With a couple points to that, we would estimate from stocking as we've talked about here. And we had, as I said earlier, a little bit of price down, particularly in the first quarter, is we start to lap some of that deflation from prior year. So volume growth, volume mixed growth in the first half of the year, and that load of mid-single-digit range. I think second half is somewhat similar from a volume mixed perspective, but we have the de-stocking impact coming in, that a headwind in the second half, largely offset by the fact that price now, we're no longer lapping the deflation from prior year.

So the price actions that were taken are a positive year over year in the second half. So I think underlying volume mixed trends, relatively similar, low to a low to mid-single digits in the first and second half, with a little bit of price differential between the halves as well that's impacting that in addition to the stocking impact.

Hey Matt, you're breaking up on it. Matt, you're breaking up on it. Can you can you start again from the top? We missed the question. Yes, that better now? Yes, try that. Okay. Basically, I'm looking to get a little bit more granular on the food contribution, specifically Kroger. How far along that rollout has progressed? Is there anything incremental in second half from that? Walmart, I know that begins to ramp in second 27 and into 28. I believe a third grocer here has announced the pilot and you referenced some pilots in grocery. Some material are those new programs in second half, or how long would you expect them to be in pilot phase before any expansion?

It seems like food is certainly newer, but perhaps broadening faster than other categories. Thanks for taking the question. Let me end where you, in part of your question, Matt, I'll address the rest here. I think there is certainly much more accelerated interest from customers. They can clearly see the benefit the returns they get as I said on a labor productivity, gross margin expansion, and sales uplift as well.

Specifically on Kroger, the rollout continues to go as they planned and the second half of the year, the only thing that we said we'd be working on with them, which we are, which is really the protein piloting and as that goes successfully in the second half of the year, we'd be looking to roll that out as we go into the start of next year. On Walmart, I think my observation on that customer that continues to be that they are really committed to the technology. You can see it roll that across all of their stores in terms of both general merchandise in apparel and increasingly now in the food area as well. They continue to see their return on investment of the technology as well, both in those areas as well as in food, typically with kind of large-scale deployments.

Timelines can vary slightly, but our current assumptions for the commercial rollout in this customer to begin in the second half of 26, and we're working very closely with them now on key deployment milestones to ensure a successful implementation. As it relates to the other customers, yes, the pilots are accelerating. I'm going to detail but which specific customers they are, and we anticipate that largely those will manifest in 27 and beyond, and that's when you see the benefit of those. Positive pilots turning into broader implementation and roll-ups.

Yeah, thanks for the question, John. So on stocking, as we said in the first quarter, we had about a nickel earnings and earnings per share impact. We estimated from stocking that started really kind of early to mid-March in the first quarter. We saw that continue as we talked about last quarter through April. At the time, we thought it would reverse later in the quarter, but we continued to see more uncertainties. We moved through the quarter and inflation continuing to increase in the middle part of the quarter. So we saw that stocking really continue not only through April, but also through May. And it's a little bit different by region, but Europe and Asia where we've seen most of that stocking impact.

We saw some of it continue in June, early June, but largely June started to more normalize from a volume impact. And then we're expecting that there are a large portion of that to come out in the third quarter. And we've started to see signs of that here the first few weeks of July as well. So I think our expectation is that will continue as we move through the rest of this quarter. None of that is in solutions. We're really a materials group phenomenon that we're seeing here. We really haven't seen that stocking impact on the solutions or intelligent label side of the business.

From the sequential headwind, basically the roughly 25 cent benefit we got from our customers' increase in their inventory in Q2, our outlook would be that assumes that roughly 25 cent headwind then in the third quarter. So that's the 50 or 50 cent Q2 to Q3 sequential headwind that we'll have from an earnings perspective. And again, that's an estimate based on what we're seeing right now. As I said with that de-stocking starting and we'll obviously see how the situation in the Middle East evolves as we go through the quarter. But right now that's our estimate of what the Q3 impact would be.

And John, let me just reiterate on particularly in the parallel general retail, there was no impact of inventory stocking or building that Greg spoke about. Most of that growth was really driven by new program roll-ups that we've had, that we talked about in the past, and some of them are delivering as we go through the second quarter into the third and fourth quarter as well.

Yeah, thanks Mike. I mean, we've seen the cycle go through this when it comes to CPG volumes. You're right. You know, CPG volumes, I think largely over the last couple of years, have been relatively flat. It's much like you, Dan. But let's see, we did see some encouraging signs in the first quarter around certain segments of CPG volumes. Home and personal care certainly grew a little bit.

But I think partly, you know, the continued weighing in of inflationary impact has no doubt has the CPGs weighing up how their balance or promotional activity for volume relative to pricing and the consumer impact thereof. And we don't necessarily see a fundamentally changing forward as we move through the rest of this year, given the uncertain environment we see. I will say, you know, our best measure that we look at is we typically look at both GDP and then we also look at retail sales, absolute retail sales. And I think we provided some in detail in the materials. You know, GDP is, I think, moves slightly lower globally, varies by region. Retail sales on the aggregate are ranked around 1% growth at the moment overall.

And think about our business has been largely consumer staple led in our base levels business with some elements of logistics going into that as well. So we don't see fundamentally a big shift in our volume. So base level volumes, Rick talked about in a kind of low single digit volume growth as we move through the rest of the year. We don't anticipate to be very different from that. The only other thing I'd say in there is we continue to take share in this business, in our base label business overall. And you know, we made a significant effort to make sure that as we think about how we service our customers, really anchoring around what it takes to service excellence and differentiation is starting to yield some benefit.

We've also lent a lot more and you've heard me talk about this into our innovation to make sure we continue to secure differentiation move forward. So as an example, you know, a lot of the work that we've seen around where the growth and the base level business come from, which is largely filmic products, we tend to have a leadership advantage in filmic products. There's also a lot of impact that we're seeing from sustainability, recyclability, and there some of our innovation like our AD team glass or our AD team fiber are really starting to resonate with customers. So a combination of those helps us drive more share gain, which I think is very durable. And then there's a secondary element, which is typically during more uncertain times, Mike.

You tend to see customers when there are uncertain times in those areas, particularly in Europe and Asia, where the flight to the market leaders for surety really. So we certainly do benefit a little bit from that impact as well.

Yeah, thanks, Anthony. So I think there's obviously a lot of drivers when it comes into thinking about our guidance site. I think the first one for us is our business has been operating very well. Our teams have been doing a really nice job managing through what's been a pretty uncertain environment and delivering solid top line growth, delivering strong productivity, and generally just increasing the pace, their underlying pace of our range growth. So we feel confident and good about what our teams are doing to perform there. And secondly, I think, as Dion mentioned earlier, we've got a little bit more uncertainties. We've talked about here with timing of de-stocking, given continued uncertainty in the Middle East and how that'll play out in the quarter, and we see more de-stocking or less de-stocking between Q3 and Q4.

So we think it's a little bit better for us to give full year at this stage. Our intention is not to go back and forth between different guidance time horizons in the future, though. So, you know, we're obviously not talking about 2027 guidance here, but our intention would be to stay with one approach as we go forward.

Thanks, George. Thanks, George. You know, as you said, we had about 30 cent impact in the first half is what we estimate the impact of the stocking was at our customers. And, you know, we're doing our best to try to triangulate about how we think that'll come out between Q3 and Q4. Our view right now is a quarter or so that comes out in the third quarter, and we've got a little bit of hangover of the rest of that in the fourth quarter. Again, it's a little tough to call, especially given how much of that stocking happened in Europe where we've seen the bulk of the inflation and the impacts there, especially with the holiday period that starts in August.

So we'll see how that settles out. But that's our best guess right now on what we're seeing so far in July, and how we think that plays out and what we're hearing from our customers through the rest of the quarter.

Yeah, and George, on your question, is AI an accelerator for IEL? Yes, I believe it is, absolutely. And maybe I'll just give you a slight context that I still think the biggest secular trend we're going to see over the next five or so years is the continued digitization of industries and of items. And if you think about it from an IEL perspective, every time an item is tagged at source and has data available about how it has made, where it has made its life through the supply chain into retail, how it gets used in retail, and ultimately to the end in terms of consumer use and disposal, you're generating significantly more data at the item level than ever historically.

Now, AI, I think, is going to be an enabler to pass out and make a lot more sense and inference from that data. That's the real benefit it brings. And so in some ways, if you think about it, if AI helps you make more sense of data, at, for example, a retail level, you now have much more ability to make more surgical decisions about what you want to do with items, which allows you to expand your ROI based on the work that you've done in the using IEL, which in itself then creates a flywheel for more AI adoption. That's the hypothesis that I have. And I think we're starting to see that player.

I'd say to more, stepping back at a more broader level for AI, this for Avery Denison, I think I've spoken in the past, George, around, you know, we're seeing that both as a driver for efficiency, internally in productivity, a driver to help us accelerate innovation outcomes quicker, and then also to help us solve customer problems to accelerate our growth algorithm. We've invested, we're investing it. We have a Chief Digital Office that we brought on board, and we've actually dedicated teams just to make sure that the big bets we're taking will ultimately manifest in driving our growth algorithm or improving our profitability.

Thank you, Ellen. On behalf of everyone at Avery Denison, I want to thank you all for joining today's call and for your continued interest in our company. As always, we're happy to address any follow-up questions you may have. Thank you again, and this concludes today's conference call.