Reckitt’s sales rose on strong health care as food revenues decline

Reckitt saw third-quarter sales beat expectations as the consumer giant was boosted by healthcare brands including Durex condoms and Nurofen.

Sales fell 0.5 percent year-on-year to £3.46 billion on a like-for-like basis over the period, bringing year-to-date sales growth for 2024 to 0.4 percent at £10.62 billion.

Health and hygiene sales growth of 3.2 and 2.1 percent respectively in the quarter helped offset a 17.4 percent decline in food sales.

The sharp drop in sales of food products was the result of a £100 million hit due to ‘supply-related’ challenges linked to the July tornado in Mount Vernon, Indiana, where Reckitt has warehousing facilities.

However, Reckitt said the impact reflected a “better than expected recovery in stocks.”

Healthcare revenues were driven by Durex, Dettol, Gaviscon, Nurofen and VMS brands, while hygiene was boosted by ‘strong contributions’ from Lysol and Finish.

Boss Kris Licht said: “Our categories are resilient, our brands are strong and we now see a more balanced algorithm for growth.

“We are on track to achieve our 2024 net sales and profit targets, with increased investments in our more competitive categories and markets, improving market share performance in our healthcare and hygiene portfolios and a normalizing market environment in US Nutrition.

“We are making good progress in implementing Reckitt’s reform by strengthening our portfolio, simplifying the organization and improving shareholder returns.”

Reckitt shares, which have been under pressure from legal action in the US over the Enfamil formula for premature babies, rose 3.1 percent to 4,912 cents late in the morning.

Like its rivals, Reckitt has also faced declining volumes, slowing growth and weaker demand in a tough consumer environment in many markets.

It has left Reckitt, which continues to defend itself against the allegations, among London-listed shares deemed so undervalued that they have become ‘sitting ducks’ for foreign takeovers, City analysts have suggested.

The group is in discussions about the sale of its home care activities as part of a change in strategy.

Reckitt plans to focus instead on its most profitable health products, including Strepsils cough sweets, Nurofen painkillers and Durex.

Adam Vettese, market analyst at eToro, said: ‘The shares are up 20 percent since falling to a ten-year low on the back of the legal issues, which is great for all the opportunists who got in at that level and are staying for longer is somewhat of a relief. term investors, even if they are not out of the woods yet.

‘The company says it is on track to meet full-year expectations, which I’m sure shareholders will be happy to hear. However, it is the legal problems that they really want to see an end to.’