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CINCINNATI ( -- Kimberly-Clark Corp. acknowledged today that to date early sales of its Cottonelle Fresh Rollwipes were disappointing in Southeast and Mid-Atlantic states in the third quarter, confirming reports from retailers that first appeared in Advertising Age.

The company said it would continue to evaluate regional results before deciding to roll the product nationally.

Kimberly-Clark's third-quarter earnings were down 4.8% to $419.4 million despite a sales increase of 5.1% to $3.7 billion. About four percentage points of the sales boost came from consolidating results for the company's Australia operation for the first time and from the addition of sales of Italy's Linostar diaper business earlier this year.

"This is not the best time to be introducing a new product," said President-Chief Operating Officer Thomas Falk in a conference call with analysts. "So far, it looks like it's going to take longer for the category to develop than we originally thought."

Last winter, the company projected Rollwipes ultimately could be part of a $400 million category, with year-one sales of $150 million, but the company later scaled its rollout back to a regional launch and has since found sales there to be behind projections.

Kimberly-Clark's third-quarter advertising, promotion and selling expenses surged by more than $100 million from a year ago, up 19.6% to $616.2 million. About a third of that increase was attributable to new product launches such as Rollwipes and the re-staging of the Scott paper towel brand behind national advertising, Mr. Falk said, with the remaining two-thirds coming from sharply increased price promotion.

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