(Reuters) -Post-it maker 3M Co said on Tuesday it expected weak consumer spending to continue into the upcoming holiday season and cut its full-year forecasts, echoing broader concerns of an uncertain economic environment.
“Consumer spending continues to be weak,” 3M Chief Financial Officer Monish Patolawala said on a post-earnings call with analysts. He expects inflation to impact consumer spending through the holiday season.
U.S. retailers, dealing with billions of dollars worth of unsold stock, have taken a more cautious view of this year’s holiday season as consumers facing decades-high inflation cut back on discretionary spending.
That cut in spending has also impacted 3M, which makes equipment such as electronic accessories and power cable connectors. Now, a strong dollar is also having an impact.
The diversified manufacturer, which gets 60 percent of its revenue from outside the United States, cut its full-year revenue and profit forecasts earlier on Tuesday, while also citing ongoing macroeconomic and geopolitical uncertainty.
The company is also facing claims from more than 290,000 former and active military members who say the company’s earplugs are defective and damaged their hearing.
“We think lowered 2022 guidance, a still challenging macro backdrop and litigation-related overhang could weigh on stock performance,” Citi analysts said in a note.
3M was able to offset higher raw material and logistics costs by raising prices, helping it post a third-quarter adjusted profit of $2.69 per share, beating estimates of $2.60, according to Refinitiv data.
It now expects full-year revenue to fall between 3.5% and 3%, down from its previous guidance of a 2.5% to 0.5% fall, while adjusted earnings per share are forecast between $10.10 and $10.35, compared with its previous outlook of $10.30 to $10.80.
3M reported third-quarter revenue of $8.62 billion, missing the average analyst estimate of $8.70 billion, according to Refinitiv data.