Abbott Laboratories Raised Prices, Prompting Sales Slump — Update

By Connor Hart

Abbott Laboratories said it raised prices across its nutrition business in order to cover rising costs, and that those increases hurt demand and stymied sales.

The medical-products maker is trying to course correct, but some of the damage has already been done. The result: Abbott posted a lower-than-expected profit during the fourth quarter and issued an organic sales growth outlook for the year that underwhelmed investors.

Shares were trading 9% lower, at $109.75, Thursday, on pace for their lowest close in more than a year. The stock is down about 10% over the past 52 weeks.

Sales across Abbott's nutrition business, which includes Similac baby formula and Ensure drinks, dropped 8.9% from a year earlier. The company attributed the decline in part to lower sales volumes.

"Higher manufacturing costs led to higher prices, which in turn are suppressing demand as consumers become increasingly more price sensitive," Chief Executive Robert Ford said on a call with analysts. He added the company has started to cut prices in an attempt to boost demand.

"Obviously, there were challenges," he said.

Overall sales rose 4.4% to $11.46 billion, below the $11.8 billion that Wall Street had forecast, according to FactSet.

Medical device sales jumped 12%, while sales across the company's established pharmaceuticals business rose 9%. The increases were partially offset by Abbott's nutrition unit as well as its diagnostics division, where sales slipped 2.5%.

Fourth-quarter profit fell to $1.78 billion, or $1.01 a share, from $9.23 billion, or $5.27 a share, in last year's comparable quarter, which included a $7.2 billion tax benefit. Adjusted earnings of $1.50 a share were in line with analyst expectations.

Looking ahead, Abbott forecast organic sales growth in the range of 6.5% to 7.5%, the midpoint of which missed Wall Street models for 7.3%. Adjusted earnings are expected to come in between $5.55 and $5.80 a share, compared with analyst views for $5.67 a share.

Despite recent challenges, Ford said the company's new product pipeline was highly productive last year, and that the company took steps toward shaping its future. The company in November agreed to acquire cancer-diagnostics company Exact Sciences in a deal valued at about $21 billion, as it looks to compete in the burgeoning market for multicancer early-detection tests. The deal is still expected to close in the second quarter.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

January 22, 2026 13:36 ET (18:36 GMT)