Adds share move in paragraph 5, CEO quotes, context in paragraphs 6 and 8
By vera dvorakova
April 24 (Reuters) - Swedish hygiene products maker Essity ESSITYa.ST reported first-quarter earnings slightly below market expectations on Thursday due to higher raw material and distribution costs.
Consumer goods companies have been raising prices since the pandemic to offset rising costs, but premium brands have started to feel pressure from budget-conscious shoppers seeking better value in private label products.
The tissue maker raised its price/mix, a metric indicating the selling price of its products, by 2.1% in the first quarter from a year earlier.
Volumes rose for its health, medical and consumer goods segment, but those for the professional hygiene segment were lower "mainly due to lower demand in North America," CEO Magnus Groth said in the earnings report.
Essity shares fell 2.8% at 0859 GMT.
The company expects stable raw material prices and lower energy prices in the second quarter, with a weakened dollar possibly offsetting higher pulp prices, the CEO told Reuters in an interview.
U.S. trade tariffs will only have a limited impact on Essity as its production is close to its customers, Groth said.
Groth said in January that Essity could move a part of its production to the U.S. if tariffs are introduced. However, he clarified on Thursday that the company currently does not have any plans to move production due to the tariffs.
Essity's much bigger American peer, the Kleenex tissue maker Kimberly-Clark KMB.N, said on Tuesday that it would incur about $300 million in costs in 2025 due to U.S. tariffs.
Kimberly-Clark also said revenues in North America declined in the quarter due to a demand slowdown.
Essity's adjusted operating profit before amortisation (EBITA) fell to 4.71 billion Swedish crowns ($486.6 million) from nearly 4.88 billion crowns a year earlier, slightly missing the 4.8 billion crowns expected by analysts polled by LSEG.
Its adjusted EBITA margin increased to 13.5% from 13.1% in the fourth quarter of 2024.
The company announced a new share buyback of 3 billion Swedish crowns on Wednesday, in alignment with the strategy laid out in its fourth-quarter report.
($1 = 9.6837 Swedish crowns)
(Reporting by Vera Dvorakova; Editing by Mrigank Dhaniwala)
((vera.dvorakova@thomsonreuters.com))
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