(Reuters) -Kleenex tissue maker Kimberly-Clark (NYSE:KMB) missed expectations for fourth-quarter net sales and profit on Wednesday due to slowing price hikes, dragging its shares down 4.5% premarket.
Kimberly-Clark's results mirror those from larger rival Procter & Gamble (NYSE:PG), as price hikes that had bolstered earnings for several quarters have started to ebb.
"The contribution from pricing to help offset unprecedented inflation is receding," said CEO Mike Hsu in a statement.
While inflation has retreated from its peak, particularly in the United States, personal spending has further slowed amid steadily rising costs for household goods.
Consumer goods companies such as Kimberly-Clark, P&G and Unilever (LON:ULVR) have also had to contend with cheaper private label brands eating into their shelf space.
The Huggies diaper maker's volumes showed sequential improvement through the year, returning to flat in the three months through December, compared to a 1% decline in the prior quarter. Meanwhile, price increases slowed to 2% from 5%.
"There's no question that pressures on our consumers and inflationary economies in some of our developing markets will remain challenging in the near term," Hsu said.
The company reported fourth-quarter net sales of $4.97 billion, compared to an LSEG poll estimate of $4.98 billion.
Quarterly adjusted earnings of $1.51 per share also missed expectations of $1.54.
Gross margin rose by 210 basis points as easing costs of raw materials helped soften the blow from higher manufacturing costs and unfavorable currency exchange rates in some markets.
Organic sales rose 3% in the fourth quarter, compared with a 5% rise in the same period last year.
Kimberly-Clark expects to post a low to mid-single-digit percentage rise in 2024 organic sales. In 2023, its organic sales rose 5%.
It also forecast high single-digit percentage growth in adjusted per-share earnings for 2024. Analysts expect adjusted profit per share to grow 7.5% in 2024.