By Richa Naidu
LONDON (Reuters) – Reckitt, the maker of Dettol cleaning products and Strepsils throat lozenges, on Thursday 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 U.S. pharmacies stock fewer products.
“Pharmacies in the U.S. 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.”
Reckitt has had a mixed year, with its stock falling sharply early on in 2024 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.
A lawsuit had accused the company of failing to warn of the medical risks of some premature baby formulas, but a jury found in November Mead Johnson was not responsible for a young boy’s debilitating intestinal disease.
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.
Shares in Reckitt were down about 2.6% in early trading on Thursday.
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).
($1 = 0.7753 pounds)
(Reporting by Richa Naidu; Editing by David Goodman and Jan Harvey)
