Avery Dennison has reported a 12% decline in net sales of $2.1bn for the first quarter (Q1) of fiscal year (FY) 2023, compared to $2.34bn in Q1 FY22.

As per the preliminary, unaudited results for Q1, which ended on 1 April 2023, the company’s Materials Group saw a nearly 13% decline in sales to $1.5bn and was 9% down both on exchange currency and an organic basis.

Meanwhile, Solutions Group’s sales went down by 11% to $605m and around 8% down on exchange currency basis and 9% on an organic basis.

At the end of Q1, the company’s net debt to adjusted earnings before interest, taxes, depreciation, and amortisation (non-GAAP) was 2.5%.

Avery Dennison realised around $9m in pre-tax savings from restructuring and net of transition costs as well as $18m from incurred pre-tax restructuring charges in Q1 FY23.

The company’s reported earnings per share (EPS) went down by 38% from $2.39 in Q1 FY22 to $1.49 in Q1 FY23.

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Meanwhile, the adjusted non-GAAP EPS for the reported period was $1.70, 29% lower than the previous year’s $2.40.

Avery Dennison CEO and chair Mitch Butier said: “Earnings per share were in line with our expectations for the first quarter, despite lower revenue due to higher-than-anticipated inventory destocking.”

The company has now revised its previously published FY23 EPS guidance.

According to the newly forecasted guidance, reported EPS is expected to range between $8.35 and $8.70 instead of the $8.85 to $9.25 stated in the previous forecast.

Similarly, the adjusted EPS will range between $8.85 to $9.20, rather than $9.15 to $9.55.

Butier added: “We continue to expect a strong second half as the pace of destocking moderates and intelligent label programmes accelerate. We have revised our guidance range for 2023 earnings per share to reflect a softer outlook for the second quarter.

“We remain confident that the consistent execution of our strategies will enable us to meet our long-term goals for superior value-creation through a balance of profitable growth and capital discipline.”