3M Sees Falling Mask Demand Slowing Sales Growth

The easing Covid-19 pandemic is expected to reduce demand for medical masks this year, 3M Co. MMM -2.18% said Monday, a trend that America’s largest manufacturer of respirators projected will dent its earnings.

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

That trend, 3M forecast, will eat into its per-share profit by about 45 cents. Overall, 3M is projecting per-share earnings between $10.15 and $10.65 in 2022, a range roughly in line with Wall Street analysts’ forecasts, according to FactSet. After accounting for lower mask uptake, sales will grow by 2% to 5% organically this year, the company estimated.

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

Manufacturers such as 3M initially struggled to meet titanic growth in mask demand in 2020 as facial coverings rapidly became essential for everything from buying groceries to flying. As production expanded, supply has improved, with high-quality masks now widely available.

When buying a respirator mask on Amazon, it’s tough to know you’re getting a good one. WSJ put eight N95 and KN95 masks to the test and found not all tested at the required 95% filtration efficiency. Here are experts’ tips for spotting a lesser quality mask. Photo illustration: Ryan Trefes

A growing list of states have been dropping mask requirements as the Omicron wave subsides.

Last year, 3M recorded $1.5 billion in sales from N95 masks and other masks, after notching $1.4 billion from such sales in 2020. In 2019, before the pandemic struck, 3M’s mask sales were $600 million.

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

The variant helped lift mask sales at the end of last year, with 3M posting $40 million in additional revenue from the product line compared with its expectations before the variant had begun spreading.

Write to Matt Grossman at [email protected]