Avery Dennison has announced preliminary, unaudited results for its third quarter, which ended on September 27, 2014.

The third quarter net sales have grown approximately 4% to $1.56 billion, and net sales are up approximately 3% on an organic basis. Including discontinued operations, the company has reported EPS of $0.68 and an adjusted EPS, which includes non-GAAP, continuing operations, of $0.77.

Through the quarter, Avery Dennison has returned $341 million of cash to shareholders, including the repurchase of five million shares for $247 million. 

It expects the adjusted EPS (non-GAAP, continuing operations) to grow from 12% to 14% in 2014.

“Third quarter EPS was in line with our expectations, despite a modest decline in sales in Retail Branding and Information Solutions (RBIS) and higher-than-expected transition costs associated with the consolidation of Pressure-sensitive Materials (PSM) operations in Europe,” says Dean A. Scarborough, Avery Dennison chairman, president and CEO.

PSM has increased by approximately 5% while the operating margin has declined 10 basis points to 10.1. The net impact of raw material input costs and pricing, transition costs in Europe, and country and product mix roughly offset the benefit of higher volume and productivity. In addition, wage inflation was largely offset by lower incentive compensation.

“We expect to deliver improved operational performance in the fourth quarter, with a reduction in the transition costs impacting PSM,” adds Scarborough. “However, given recent top-line trends and headwinds from currency, we have modestly lowered our guidance for full-year adjusted earnings per share growth to approximately 13%. Meanwhile, we continue to execute our disciplined capital allocation strategy, reflected in the increased level of share repurchase during the past quarter.”

Operating margin has improved 220 basis points to 5.4% as the benefit of productivity, lower restructuring costs and lower incentive compensation more than offset the impact of wage inflation and lower volume. Adjusted operating margin improved 80 basis points.

RBIS segment sales are down approximately 2%.

From continuing operations, the company expects 2014 earnings per share of $2.60 to $2.65. Excluding an estimated $0.40 per share for restructuring costs and other items, it expects adjusted (non-GAAP) earnings per share from continuing operations of $3.00 to $3.05.