Kleenex tissue maker Kimberly-Clark cut its full-year organic net sales forecast after missing Wall Street estimates for third-quarter sales on Tuesday.
The cut came as consumers swapped the brand’s pricier personal care goods for cheaper alternatives.
Although US inflation has eased from its peaks, consumer spending has continued to decelerate as goods ranging from food and apparel rose in price in the past few years.
Fuelled by higher input costs, consumer companies have raised prices significantly, prompting customers to opt for more affordable, private-label brands.
The company’s overall volumes in the quarter ending 30 September was flat compared with a year ago, while prices were up 1%.
The price hikes, however, helped the company report a quarterly adjusted profit of $1.83 per share, above analysts’ estimates of $1.70 per share, according to data from the London Stock Exchange group.
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Its results reflect broader market trends, with larger rival Proctor & Gamble reporting a surprise drop in quarterly sales last week as consumers in China shunned its products.
Meanwhile, US consumers bought fewer named beauty and baby care brands.
Kimberly-Clark now expects organic net sales to grow by between 3% and 4% this year, down from the previously expected mid-single digit percentage rate.
Total sales fell 2% for its consumer tissue business during the July-to-September quarter, driven by inventory reductions by retailers in North America.
Bloomberg News reported last month that Kimberly-Clark is considering a sale of its international tissue business, which could be worth around $4 billion, as the company seeks to concentrate on more profitable segments of its operations.
The Huggies nappy maker posted a 4% drop in quarterly sales to $4.95 billion, missing analysts’ estimates of $5.05 billion.
In North America, sales declined for its consumer tissue and Kimberly-Clark professional businesses, while personal care was in line with last year.
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