Healthcare helps Reckitt beat quarterly sales estimate to remain on target

Reckitt's quarterly like-for-like net sales fell 0.5 per cent, ahead of the 1.7 per cent decline analysts had expected in a company-supplied poll

Reckitt reported a smaller than expected fall in third-quarter underlying sales on Wednesday, helped by more shoppers buying its health products, which include Nurofen painkillers and Strepsils lozenges.

Shares in the consumer goods group rose 2 per cent in morning trading, with signs of improving volumes welcomed by investors after a difficult year.
 

The stock fell sharply earlier this year over an internal investigation into its Middle Eastern business and its involvement in litigation surrounding an infant nutrition product made by its U.S.-based Mead Johnson business.
 

Reckitt said in July it was considering options for the nutrition business and that it would offload a portfolio of homecare brands by the end of 2025, planning to refocus on healthcare and hygiene.
 

"We're reviewing the organisation," CEO Kris Licht told journalists on a call. "Surely that will result in changes to staffing levels and certain organisation structures will change."
 

Reckitt, which also owns the Dettol and Lysol cleaning brands, said it was on track to meet full-year targets.
 

Its quarterly like-for-like net sales fell 0.5 per cent, ahead of the 1.7 per cent decline analysts had expected in a company-supplied poll.

Price/mix, a metric that reflects how much Reckitt sold its products for, rose 0.9 per cent while volumes declined 1.4 per cent, weakened by Reckitt's nutrition business. Analysts expected the price/mix to rise by 1.4 per cent and volumes to fall by 3.1 per cent.
 

A roughly 14 per cent sales volume decline in Reckitt's nutrition business was driven by "the combination of lapping high market shares experienced during the U.S. competitor supply shortage and the impact from the Mount Vernon tornado, which destroyed both finished goods and raw materials and impacted short-term supply to customers in the third quarter," the company said.
 

The unit earlier in the year suffered supply disruptions after a tornado damaged a third-party U.S. warehouse.
 

"Reckitt's results were less bad than feared," Waverton Investment Management portfolio manager Tineke Frikkee said.

"Litigation remains the main overhang as well as the uncertain cost-or-benefit of corporate restructuring expected towards the end of 2025."

(Reporting by Richa Naidu; Editing by Jason Neely and Mark Potter)

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