Reckitt, the maker of Dettol cleaning products and Strepsils throat lozenges, missed expectations for fourth-quarter like-for-like net sales as a late flu and cold season dented demand for its over-the-counter medicines.
The British company said it expects full-year like-for-like net sales growth of between 2% and 4%, and that it has so far this year seen a boost from sales in emerging markets such as India and China.
Reckitt expects low-single digit sales growth in North America in the first quarter of the year, however, as US pharmacies stock fewer products.
"Pharmacies in the US are under some pressure in terms of having less traffic," CEO Kris Licht told Reuters in an interview. "Other retailers, large retailers that we work with, are doing quite well."
The company 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.
Performance Highlights
The company's fourth-quarter like-for-like net sales rose 4.6%, behind the 5.3% growth analysts had expected in a company-supplied poll.
The company, whose products include Nurofen tablets, cold remedy Lemsip and Durex condoms, said sales from its hygiene business rose 5.5%, beating analysts' estimates of 4.1% growth from a company-supplied poll.
However, fewer people bought Reckitt's seasonal cold products during the quarter, and sales in the company's health unit rose only 2.4%. Analysts had expected growth of 6.9%.
For the full year ended December, Reckitt's operating profit rose 3% to 3.48 billion pounds ($4.49 billion).
Analyst Comment
AJ Bell analyst, Russ Mould, stated, “You’d need a bottle of Vanish to clean up the messy set of results from Reckitt. There is certainly plenty for investors to unpick in the statement as the company continues along the restructuring path.”
He added, “On the plus side, proposals to reshape the business have been firmed up, with a plan to exit the portfolio of non-core brands – somewhat ironically dubbed Essential Home – on track to complete this year. Reckitt also delivered strong margin performance and hiked the dividend. Of more concern to the market in the short term will be the soggy fourth quarter sales performance which seems to be leaking into the outlook for 2025 as a whole.
News by Reuters, additional reporting by ESM.
