The recent announcement from Reckitt reveals that, despite a dip in sales due to supply shortages in its nutrition sector, the company remains firmly on track to meet its 2024 targets.
Reckitt, known for its health and hygiene products, experienced a 0.5% decline in net sales on a like-for-like basis in the third quarter. However, for the period ending 30 September, the company reported a 0.4% increase in sales. This annual uplift was driven by a robust 2.8% growth in the health and hygiene divisions, though this was notably countered by a downturn in its nutrition segment.
The nutrition business faced significant setbacks, with like-for-like sales plummeting by 11.6% over the year and 17.4% in the last quarter. These challenges stemmed from approximately £100 million worth of supply disruptions caused by a July tornado in Mount Vernon, which destroyed both finished goods and raw materials, hindering short-term supply chains.
Nevertheless, Reckitt saw ‘sequential’ improvement in market share growth and maintained volume momentum across its health and hygiene divisions, achieving increases of 0.7% and 1.2% respectively in the third quarter.
Sales within the hygiene sector alone rose by 3.7% over the year and 2.1% in the third quarter. This growth was primarily driven by a significant uptick in sales of disinfectant products, particularly those under the Lysol brand, which gained ground in established markets for surface disinfection sprays and wipes. Additionally, products like Finish, Air Wick, Vanish, and Harpic contributed to this upward trend.
Looking ahead, Reckitt is forecasting a 1% to 3% like-for-like net sales growth for the full year. Although the company anticipates only lower-end growth for its health and hygiene portfolios, it projects a less severe decline for its nutrition segment than previously expected, now predicting a high single-digit fall instead of a double-digit decrease.
Chief Executive Kris Licht expressed optimism about the company’s progress, highlighting the resilience of their categories and the strength of their brands. He stated, ‘We are on track to deliver our net revenue and profit targets for 2024, with increased investment across our more competitive categories and markets, improving market share performance across our health and hygiene portfolios, and a normalising market environment in US nutrition.’
Despite current challenges in its nutrition sector, Reckitt remains poised to achieve its 2024 objectives, buoyed by its resilient brands and strategic market adjustments.
