Reckitt lifts sales view as coronavirus spurs demand for Dettol
Social distancing hurts condom sales and causes concern for infant milk prospects
Demand for cleaning products such as Dettol and Lysol pushed a much higher than expected rise in sales at consumer goods company Reckitt Benckiser. Photographer: Hollie Adams/Bloomberg
The company raised its full-year outlook on Tuesday amid continuing demand for cleaning products in the ongoing coronavirus pandemic.
“While there is still more work to do, I’m pleased to say that Reckitt Benckiser today is in much better shape than it was a year ago,” chief executive Laxman Narasimhan told reporters.
He is banking on longer-term elevated use of soap and disinfectants beyond the pandemic, as well as the roll-out of products into new countries and areas, such as on public transport and in hotels.
The company said quarterly sales on a like-for-like basis rose 13.3 per cent – ahead of analysts’ projections for a 9.5 per cent increase.
For the full year, Reckitt now sees a low double-digit rise in like-for-like growth, up from a prior forecast of high single-digit growth. It may be able to meet its medium-term target for mid-single-digit growth a year early. Last year’s growth was just 0.8 per cent.
Third-quarter like-for-like sales rose 19.5 per cent in the hygiene business, 12.6 per cent in its health business, and 4.1 per cent in its nutrition business.
While relieving overall pressure on a company that has faced intense competition for several years, the Covid-19 pandemic is hurting sales in some areas. Social distancing has pressured Durex condoms, while the company said reduced birth rates this year and next should weigh on its baby formula, which includes Enfamil.
Social distancing is also likely to result in a weak flu season, which will impact cold remedies like Mucinex, it said.– Reuters