Kris Licht, chief executive, said it was a ‘good’ quarter for the company, stating they are ‘returning to a more balanced contribution from price, mix and volume’, against the backdrop of easing inflation
Shares in consumer goods powerhouse, Reckitt, have risen after the company reported better-than-expected sales for the past quarter.
The company highlighted successful growth among brands like Dettol, Durex and Finish. In early trading, shares in the company ticked up as investors also welcomed reassurance from bosses over US litigation related to its premature baby formula business.
This comes after a significant decrease in the firm’s stock by around one-third over the previous 12 months driven by customers opting for cheaper, supermarket own-brand alternatives. Reckitt, which also produces Nurofen and Strepsils, announced on Wednesday that the group saw a 1.5% increase in like-for-like sales, totalling £3.73billion, over Q1 of 2024.
Nevertheless, sales volumes experienced a slight decline of 0.5% while higher pricing bolstered overall growth. Kris Licht, chief executive, said it was a “good” quarter for the company, stating they are “returning to a more balanced contribution from price, mix and volume”, against the backdrop of easing inflation.
The hygiene branch of the firm saw a sales jump of 7.1% for the quarter, with volume sales up by 2.9%. Major Reckitt products such as Lysol, Dettol, Durex and Finish all experienced an increase in sales volume throughout the period.
However, the nutrition division continued to be the company’s weakest performing sector, as sales dipped by 9.9%, accompanied by a 9.4% drop in quantities purchased by consumers. This was partly linked to a boost in the previous year after supply issues at a major competitor.
The firm’s nutrition business has also come under pressure over potential large liabilities from lawsuits in the US related to its Enfamil Premature 24 baby formula, following a ruling in Illinois last month. The company, which has rejected the ruling, has vowed it will continue to sell the products and said the US nutrition business is still performing well.
Mr Licht added: “We are well placed to deliver value creation by leveraging our strong portfolio of brands through investment and innovation. This drives our continued strong free cashflow generation, our accelerated share buyback programme and increased cash returns to shareholders.”
Reckitt shares were 4.8% higher at 4,453p on Wednesday morning.
