Avery Dennison, the renowned label maker, witnessed a notable increase in net income during the fourth quarter, with a promising forecast for substantial earnings growth in 2024. The company believes that the period of inventory drawdown among its customers has come to an end.

During the fourth quarter, Avery Dennison recorded earnings of $143.1 million, or $1.77 per share, up from $122.9 million, or $1.51 per share, in the previous year. Adjusted earnings stood at $2.16 per share, slightly below the average Wall Street target of $2.17 per share as reported by FactSet.

The company's fourth-quarter sales reached $2.11 billion, surpassing the average Wall Street target of $2.1 billion, primarily due to robust demand at Avery's solutions unit. Although sales at the materials unit observed a slight decline of 1.6% to $1.42 billion, sales at the solutions unit experienced a substantial surge of 18% to $691.7 million, primarily driven by the high demand for premium items.

Looking ahead, Avery Dennison has set an ambitious profit target for 2024, anticipating earnings between $8.65 and $9.15 per share, a significant increase from the $6.20 per share achieved in 2023. Excluding estimated charges of 35 cents per share related to restructuring and other one-off items, the company expects adjusted earnings for 2024 to range between $9 and $9.50 per share.

President and Chief Executive Deon Stander expressed confidence in the company's future, stating, "Following a challenging 2023, which included significant inventory destocking downstream from us, we expect to deliver strong earnings growth in 2024 and make progress towards our 2025 goals."

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