Consumer goods major Reckitt Benckiser on Wednesday said its full-year sales would be at the upper end of previous guidance and reported better than expected quarterly sales, helped by sweeping price rises.
Reckitt and other consumer goods companies, from Procter & Gamble to Nestle, are raising prices sharply this year, enabling them to pass record energy and supply chain cost increases on to consumers.
The higher prices, which are contributing to a global cost-of-living crisis, are denting sales volumes as many people turn to cheaper or private label products. But, so far, falling demand, has been more than offset by price increases.
The maker of Dettol cleaning products and Durex condoms now expects like-for-like net revenue sales to grow between 6-8 per cent versus its previous estimate of an increase of 5-8 per cent, it said.
Reckitt, whose products also include Lysol cleaning products and Strepsils throat lozenges, said it continues to target growth in adjusted operating margins.
The company's third-quarter like-for-like revenue rose 7.4 per cent, above the 6.1 per cent growth analysts had expected in a company-supplied poll.
Sales volumes declined 4.6 per cent. Excluding Lysol sales, which were boosted by Covid-19 this time last year, they declined 1 per cent. Prices for the company's products rose 12 per cent in the quarter.
Net revenue growth benefitted from the temporary uplift in demand for infant formula in the US due to a temporary shortage, prompted by rival Abbott Laboratories recalling products in February.
Reckitt, which has held off on price increases in this category, said it estimated this benefit to have added about 3 per cent to net revenue growth in the third quarter.
