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Reckitt raises revenue outlook after second quarter beats expectations

Reckitt

Reckitt

Highlights

 
  • Expects 2025 net revenue growth for core Reckitt products above 4 per cent
  •  
  • Sales growth in North America and Europe misses expectations
  •  
  • First-half operating profit beats market view
 

Consumer goods company Reckitt raised its annual revenue forecast on Thursday after second-quarter net sales growth topped expectations as strength in emerging markets offset weakness in North America and Europe.

Shares jumped 10 per cent to their highest level since early 2024 and were headed for their biggest one-day percentage gain since 2000.


Reckitt, the maker of Durex condoms and Lysol cleaning products, is pivoting to focus on its 11 so-called "power brands" under CEO Kris Licht, as the sector grapples with weak demand and intense competition.

The company reported like-for-like quarterly net revenue growth of 1.9 per cent, compared with 1.7 per cent forecast in a company-compiled consensus.

Reckitt also announced a new share buyback programme of £1 billion over the next 12 months.

Growth in North America and Europe fell short of expectations, dragged by a challenging consumer backdrop and the expected shelf reset of its flu relief medicine Mucinex due to reformulation.

But strong sales in China, India and Latin America made up for weakness in those key markets.

Among Reckitt's other well-recognised brands are Strepsils throat lozenges and Harpic bathroom cleaning products.

"We delivered excellent growth in emerging markets and navigated a challenging consumer environment in our developed markets," Licht said in a statement.

Reckitt raised its 2025 like-for-like net revenue growth forecast for its core business to above 4 per cent, from between 3 per cent and 4 per cent expected earlier.

It now expects overall group like-for-like net revenue growth between 3 per cent and 4 per cent for the year, compared with an earlier forecast of 2 per cent to 4 per cent growth.

The company last week sold a majority stake in its Essential Home business to private equity firm Advent for $4.8 billion. It is also looking at strategic options for its Mead Johnson division, which is the subject of a number of baby formula lawsuits in the US.

Reckitt posted operating profit of £1.71 billionfor the six months ended June 30, beating analysts' average expectations of £1.66 billion.

(Reuters)