Reckitt’s core like-for-like revenue growth was 3.3% against a 3.6% analyst forecast; shares slumped 7.1%.
Reckitt, the maker of Dettol, Durex condoms and Lysol cleaning products, lowered its annual revenue forecast on Tuesday and reported third-quarter revenue growth below analyst expectations, hampered by a challenging consumer environment and manufacturing constraints in its North American market.
Like-for-like net revenue growth in its core business was 3.3% for the quarter ended September 30, compared with a 3.6% forecast by analysts in a company-compiled poll. Its shares slumped 7.1% in early trading.
Like-for-like revenue in North America fell 1.3% in the quarter. Reckitt lowered its guidance range for net revenue growth to 3.5% to 4.5% from 4% to 5%.
“North America was below our expectations,” said CEO Kris Licht. “While consumer demand for Lysol remains strong, temporary manufacturing constraints limited our ability to fully meet demand.”
Emerging market revenue growth of 8% was below analyst expectations of a 9.1% rise. Reckitt said it had implemented selective pricing to address higher input costs arising from the war in the Middle East.
The main culprit for the miss was the Lysol manufacturing issue, which will be seen as disappointing and a new negative, Barclays analyst Warren Ackerman said in a note.
Source: Reuters
