Tissue maker Essity reported a decline in third-quarter core earnings in line with expectations, but added that sales volumes and market share had increased.
The Swedish hygiene product maker reported that it had maintained “good price discipline” and on Thursday, its shares climbed 2% in morning trade.
Essity said sales volumes rose 2% year-on-year, its second consecutive quarter of increases after six months of falls.
It also managed to hike prices in its health and medical divisions, as well as its professional hygiene section.
However, its consumer goods segment – which is its biggest for net sales – saw prices fall 2.3%.
These prices are now expected to rise in the fourth quarter, according to the company’s chief executive Magnus Groth.
Adjusted operating earnings before interest, tax and amortisation (EBITA) was 5.10 billion Swedish Crowns ($482 million) for the quarter, a 4% decrease compared to the same quarter a year previous.
This figure was also slightly ahead of a London Stock Exchange Group (LSEG) consensus estimate of 5.02 billion crowns.
Growth
Groth added to Reuters that Essity had gained market share in most areas, including regaining ground it lost for consumer goods products such as tissues in Europe.
He said the growth in sales volumes was thanks to a number of product launches this year and “an acceleration in our advertising and promotional efforts.”
Consumer goods companies have been increasing prices since the pandemic to combat escalating costs while trying to attract consumers with innovative products.
However, some premium brands have begun to feel the pressure as budget-conscious customers opted for cheaper private label products, hurting sales volumes.
Essity’s American peers such as Proctor & Gamble and Kimberly-Clark both missed expectations in the quarter as consumers sought cheaper, non-branded products.
Regardless, both companies managed to beat profit expectations aided by price hikes.
Read More: Kimberly-Clark Cuts Forecast As Customers Opt For Cheaper Alternatives
