Fourth-quarter sales disappoint at Reckitt, shares slide

28th Feb 2024 09:40

(Sharecast News) - Shares in Reckitt Benckiser Group tumbled on Wednesday, after fourth-quarter sales missed expectations.

The London-listed owner of Durex, Nurofen, Vanish and Dettol, among others, said sales fell 7% in the three months to December end to £3.6bn, or by 1.2% on an underlying basis. Analysts had been expecting like-for-like sales to grow by 1.6%.

Reckitt said that while hygiene sales had risen 5.2% during the three months, health had been hit by the "phasing and shape" of the cold and 'flu season, prompting sales to fall 2%.

Nutrition also continued to struggle, as it lapped a prior year competitor supply issue in the US and specialist baby formula Nutramigen was recalled.

Annually, group revenues rose by 1.1%, or 3.5% on a like-for-like basis, to £14.6bn.

However, Reckitt said it had identified an "understatement of trade spend" in two Middle Eastern markets, which meant full-year net revenues were £55m lower than anticipated.

Full-year operating profits fell 22% to £2.5bn.

As at 0915 GMT, shares in Reckitt were down 10% at 5,254p.

However, the consumer goods firm struck a positive tone looking forward, noting that it was "confident" for the year ahead.

It also forecast like-for-like net revenues growth of 2% to 4% for the group, with mid-single-digit growth for its health and hygiene portfolios.

The nutrition business was forecast to see a mid-to-high single digit decline, Reckitt noted, "as it continues to rebase in the first half of the year and returns to growth later in the year".

Group adjusted operating profit was forecast to grow ahead of net revenue growth.

New chief executive Kris Licht said: "2023 was a year of progress for Reckitt. We delivered a good trading performance in health and hygiene. Nutrition began rebasing and held market leadership in the US.

"Our innovation platforms proved that they can deliver meaningful growth through premiumisation, household penetration and category creation.

"While our performance in the fourth quarter was unsatisfactory, we look to 2024 and beyond with confidence."