Avery Dennison Corporation has announced preliminary, unaudited results for its second quarter ended July 2, 2016. All non-GAAP financial measures referenced in this document are reconciled to GAAP. Unless otherwise indicated, comparisons are to the same period in the prior year.

“We had another solid quarter, with earnings above our expectations,” says Mitch Butier, Avery Dennison president and CEO. “PSM delivered exceptional profitability, reflecting strong organic growth in the emerging markets, and productivity gains globally. Amidst challenging apparel market conditions, RBIS earnings came in as expected. The team continues to make good progress with the transformation of this business.

“We have raised our outlook for full year earnings per share, reflecting the strong operating performance in the second quarter,” he adds. “We remain confident that the consistent execution of our strategies will enable us to continue meeting our long-term goals for superior value creation through a balance of profitable growth and capital discipline.”

Organic sales change refers to the increase or decrease in sales excluding the estimated impact of currency translation, product line exits, and acquisitions and divestitures. Adjusted operating margin refers to income before interest expense and taxes, excluding restructuring charges and other items, as a percentage of sales.

PSM reported sales increased approximately 3%; on an organic basis, sales grew approximately 5%. Within the segment, organic sales growth was mid-single digit for Label and Packaging Materials, and low-single digit for combined Graphics and Performance Tapes. Operating margin improved 130 basis points to 13%, as the benefit of productivity initiatives and increased volume more than offset higher employee-related costs and the net impact of price and raw material input costs. Adjusted operating margin improved 120 basis points.

RBIS reported sales decreased 2%; on an organic basis, sales grew approximately 2%. Operating margin increased by nearly five points to 7.5%, largely due to the benefit of lower restructuring charges. Adjusted operating margin improved 30 basis points as the net savings associated with the business model transformation and higher volume were partially offset by the impact of strategic pricing actions and higher employee-related costs.

The company repurchased 0.9 million shares in the second quarter of 2016 at an aggregate cost of $64 million. Net of dilution, the company reduced its share count by 0.3 million in the second quarter. The cost of repurchases, net of proceeds from stock option exercises, was $39 million.

In its supplemental presentation materials, “Second Quarter 2016 Financial Review and Analysis,” the company provides a list of factors that it believes will contribute to its 2016 financial results. Based on the factors listed and other assumptions, the company now expects 2016 earnings per share of $3.35 to $3.50. Excluding an estimated $0.15 per share for restructuring charges and other items, and $0.30 per share for the non-cash charge to settle the US pension obligations, the company now expects adjusted earnings per share (non-GAAP) of $3.80 to $3.95.