By Agata Rybska
(Reuters) -Swedish hygiene products maker Essity reported a decline in third-quarter core earnings – one in line with expectations – but added that sales volumes and market share had increased and it had maintained “good price discipline”.
Its shares climbed 2% in morning trade.
The maker of Tempo tissues and Libresse feminine care products said sales volumes rose 2% year on year, a second consecutive quarter of increase after six months of falls.
Essity managed to hike its prices in its health and medical as well as professional hygiene divisions.
However, its consumer goods segment – its biggest by net sales – saw prices fall 2.3% though those prices are expected to rise in the fourth quarter, CEO Magnus Groth told Reuters in an interview.
Overall, its price/mix, a metric reflecting how much it sold its products for, edged 0.1% lower for the quarter.
Adjusted operating profit before amortisation (EBITA) came in at 5.10 billion Swedish crowns ($482 million) for the quarter, a 4% decrease from the same quarter a year earlier and slightly ahead of an LSEG consensus estimate of 5.02 billion crowns.
Groth added that Essity has 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 due to the launching a number of attractive products this year and “an acceleration in our advertising and the promotional efforts.”
Consumer goods companies have been increasing prices since the pandemic to combat escalating costs while trying to attract consumers with innovative products. But some premium brands have begun feeling pressure from budget-conscious shoppers seeking better value in private label products.
Essity’s American peers, the much bigger Pampers diapers maker Procter & Gamble and Kleenex tissue maker Kimberly-Clark both missed sales expectations in the quarter as consumers sought value in cheaper, non-branded personal care products, but they managed to beat profit expectations aided by price hikes.
($1 = 10.5840 Swedish crowns)
(Reporting by Agata Rybska; Editing by Christopher Cushing, Janane Venkatraman and Edwina Gibbs)
