NEW YORK — Kimberly-Clark, the maker of Huggies diapers and Kleenex tissues, said Monday that its fourth-quarter profit fell 8 percent as the dollar grew stronger and consumers spent less in the face of economic woes. The company also lowered its expectations for 2009.
The results were slightly below analysts’ expectations.
The company earned $419 million, or $1.01 per share, in the quarter ended Dec. 31. It earned $456 million, or $1.07 per share, a year earlier. Sales slipped 3 percent to $4.6 billion from $4.76 billion for the period.
Analysts surveyed by Thomson Financial, who typically exclude one-time items, on average expected the company to earn $1.03 per share on revenue of $4.66 billion.
Chief Executive Thomas Falk told investors that Kimberly-Clark, based in suburban Dallas, did worse than expected in North America and Europe.
Falk said the company may cut prices on certain items. “We are fine-tuning our pricing and promotional plans to ensure we remain competitive, particularly in diapers and training pants in North America,” he said.
He told investors on a conference call Monday, however, that the company would likely favor promotions over outright price cuts because it had yet to restore its profit margins after 2008’s run-up in commodity costs.
“I would say changing the list price is a very blunt instrument,” Falk said. “There’s a lot of other things you do from a strategic marketing standpoint before you get to that.”
He said sales have suffered as consumers “de-stock” their pantries at home and buy only what they need right away in order to stretch every last dollar.
“They’re conserving cash and don’t want to build household inventory,” he said. “If you’re out of paycheck, it may wait until the next paycheck cycle.”
For the fourth quarter, sales of personal care products fell 2.5 percent and sales of consumer tissue products fell 2.6 percent.
The company said that 2009 per-share profit would be $4 to $4.20 per share. It also predicted that sales revenue would fall 7 percent, including the effect of currency fluctuations.
As the dollar’s value grows in comparison with other currencies, sales revenue from outside the U.S. shrinks when it is converted back into dollars.
“Management is doing right to guide expectations well below the Street as currency, pension and negative manufacturing variances weigh on earnings in 2009,” Deutsche Bank analyst Bill Schmitz Jr. wrote in a research note.
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