(Reuters) – Kleenex tissue maker Kimberly-Clark (NYSE:KMB) on Tuesday cut its full-year organic net sales forecast after missing Wall Street estimates for third-quarter sales, as cost-conscious consumers swap its pricier personal care goods for cheaper alternatives.
Although U.S. inflation has eased from its peaks, consumer spending has continued to decelerate as goods ranging from food to apparel got costlier over the last two years.
Fueled 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 to Sept. 30 was flat compared with a year ago, while its 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 LSEG data.
The results reflect broader market trends, with larger rival Procter & Gamble (NYSE:PG) reporting a surprise drop in quarterly sales last week as consumers in China shunned its products while those in the U.S. bought fewer name brand beauty and baby care products.
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 valued at around $4 billion, as the company seeks to concentrate on more profitable segments of its operations.
The Huggies diaper 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 year ago.