(Reuters) -Consumer goods group Reckitt beat expectations for third-quarter like-for-like net sales growth on Wednesday, boosted by strength in emerging markets, which marked a bright spot for a sector weighed down by broader pressures.
Reckitt has narrowed its focus to core brands and is cutting costs to increase margins under CEO Kris Licht as the sector contends with fragile consumer sentiment and pressure from private-label competitors.
The maker of Durex condoms and Lysol cleaning products reported total group like-for-like net revenue growth of 7% for the quarter ended September 30, compared with analysts’ average forecast of 6.4% in a company-compiled poll.
KEEPS FULL-YEAR REVENUE GUIDANCE
While rivals Unilever and P&G have yet to report results, Nestle, the world’s largest packaged food company, announced plans earlier this month to cut 16,000 jobs, underscoring challenges the industry faces.
Reckitt, however, maintained its 2025 guidance for like-for-like net revenue growth of above 4% for its core business, which excludes Essential Home and Mead Johnson, and 3% to 4% for the group overall.
“These results reflect sequential volume improvements and the strength of our Powerbrands,” Licht said in a statement.
Like-for-like revenue at Reckitt’s core business, home to brands including Strepsils throat lozenges and Dettol handwash, rose 6.7% in the quarter, compared with 5.5% expected in the poll.
That was helped by stronger than expected like-for-like sales growth of 15.5% in emerging markets, which offset softer growth in other regions. Emerging markets accounted for about 42% of core Reckitt net revenues in the quarter.
“Its improving track record of delivery and attractive growth in the Consumer Staples context should be well-received,” RBC Capital Markets analysts said.
Reckitt also said it continued to expect to complete the sale of its Essential Home business by the year-end.
(Reporting by Yadarisa Shabong and Pushkala Aripaka in Bengaluru. Editing by Rashmi Aich and Mark Potter)
Comments