Amid a major restructuring plan announced back in July, Reckitt has posted a smaller-than-expected fall in third-quarter sales as growth in its health and hygiene units helped offset a significant fall in its nutrition business.
In the period to the end of September, the group’s like-for-like revenue slipped 0.5 per cent, better than the 1.7 per cent decline forecast by analysts.
In its hygiene division, revenue was up 2.1 per cent, with Reckitt noting that it was seeing broad-based growth across its so-called "Power brands" such as Lysol and Finish, despite lapping significant launches last year and a “competitive market backdrop”.
In health, revenues rose 3.2 per cent, driven by its Durex, Dettol, Gaviscon, Nurofen and VMS brands. However, its seasonal OTC brands are down mid-single-digits in the year-to-date due to tough comparatives and a slow end to last year’s cold and flu season.
Meanwhile, Reckitt’s nutrition division suffered a 17.4 per cent decline during the quarter, driven by a combination of lapping high market shares experienced during the US competitor supply shortage and the impact from the Mount Vernon tornado, which destroyed goods and raw materials and impacted short-term supply to customers.
The group stated its Q3 performance was in line with guidance at the half year, and it was on track to deliver its net revenue and profit targets for 2024.
“Our categories are resilient, our brands are strong, and we are now seeing a more balanced algorithm for growth,” said CEO Kris Licht.
Earlier this year, Reckitt revealed that it had launched a strategic review of its infant formula business and outlined plans to sell some of its non-core home care brands by the end of 2025 in an effort to streamline the business and accelerate its long-term growth.
Licht concluded, “We are moving at pace on the execution of reshaping Reckitt through sharpening our portfolio, simplifying the organisation and improving shareholder returns. I look forward to providing further details on our new operating model and future targets with our FY24 results update.”
