3M sees falling demand for masks slowing sales growth

Mitigation of Covid-19 pandemic expected to reduce demand for medical masks this year, 3M Co.

MMM -1.26%

said on Monday, a trend that the largest US ventilator maker projects will affect its profits.

Masks became a billion-dollar business for the St. Paul, Minn.-based maker starting in 2020 when the virus’s rapid spread prompted consumers and healthcare workers to seek safety facial coverings to try to avoid infection. Now, as the latest U.S. surge caused by the Omicron variant wanes, 3M said slowing mask sales will likely reduce its organic growth by about 2 percentage points this year.

This trend, according to 3M’s forecast, will reduce its earnings per share by about 45 cents. Overall, 3M expects earnings per share of between $10.15 and $10.65 in 2022, a range roughly in line with Wall Street analysts’ forecasts, according to FactSet. After factoring in declining mask usage, sales will grow 2% to 5% organically this year, the company estimated.

Shares were near flat Monday morning ahead of scheduled investor presentations. The stock is down 11% over the past year, closing Friday at $159.54.

Manufacturers such as 3M initially struggled to meet the titanic growth in demand for masks in 2020, as face coverings quickly became essential for everything from groceries to theft. As production increased, the supply improved, with high-quality masks now widely available.

When you buy a respirator mask on Amazon, it’s hard to know you’ve got a good one. WSJ tested eight N95 and KN95 masks and not all tested with the required 95% filtration efficiency. Here are the expert tips for spotting a lesser quality mask. Photo illustration: Ryan Trefes

A growing list of states have dropped mask requirements as the Omicron wave wanes.

Last year, 3M recorded $1.5 billion in sales of N95 masks and other masks, after making $1.4 billion of those sales in 2020. In 2019, before the pandemic hit, 3M’s mask sales were $600 million.

Last month, the Centers for Disease Control and Prevention updated its guidelines to suggest that more people should wear high-quality N95 masks and similar versions, rather than just cloth masks, to combat the spread of the more transmissible Omicron variant.

The variant helped boost mask sales late last year, with 3M posting $40 million more revenue from the product line than it had expected before the variant began to catch on.

Write to Matt Grossman at matt.grossman@wsj.com

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