(Reuters) – Huggies diaper maker Kimberly-Clark’s fourth-quarter sales missed market expectations on Wednesday as price hikes soften amid choppy demand for its consumer goods products.
Price hikes undertaken over the past year to offset a hit from supply chain disruptions and higher input costs have marred demand from inflation-weary consumers.
Consumer goods companies such as Kimberly-Clark and larger rivals Procter & Gamble and Unilever have also had to contend with cheaper private label brands eating into their shelf space.
While the company’s overall volumes were flat in the three months through December, compared to a 1% decline in the prior quarter, price increases slowed to 2% from 5%.
Kimberly-Clark reported fourth-quarter net sales of $4.97 billion, while analysts on average had expected sales of $4.98 billion, according to LSEG data.
Volumes in its personal care segment grew 1% in the quarter, the consumer tissues unit reported a decline of 1%, while volumes in the KC professional segment, which includes brands such as Kleenex and Scott, fell 4%.
The company said it expected the period of cost recovery and supply chain stabilization to be “largely behind” it, and forecast high single-digit percentage growth in adjusted earnings per share for fiscal 2024.
Analysts expected adjusted profit per share to grow 7.5% in 2024, as per LSEG data.
Gross margin rose by 210 basis points in the fourth quarter, as easing input costs such as those of raw materials helped soften the blow from higher manufacturing costs and unfavorable currency exchange rates in some markets.
The company reported quarterly adjusted earnings of $1.51 per share. Analysts had expected a per-share profit of $1.54.
It expects to post a low to mid-single-digit percentage rise in 2024 organic sales. In 2023, its organic sales rose 5%.
(Reporting by Juveria Tabassum; editing by Milla Nissi)
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