LONDON, April 24 (Reuters) - Consumer goods group
Reckitt's like-for-like sales growth beat estimates in
the first quarter as more people bought its Lysol, Dettol and
Finish cleaning products even as prices rose, it said in a
trading update on Wednesday.
The company also said it faces "contingent liabilities" - a
term used for those dependent on future events - from a product
liability suit filed against its Mead Johnson infant formula
business in the United States.
An Illinois jury in March ordered Mead Johnson to pay $60
million to the mother of a premature baby who died of an
intestinal disease after being fed the company's Enfamil baby
formula. Mead Johnson said in March it would appeal the verdict.
"It's a complex litigation. It's early stages," CEO Kris
Licht said in a call with journalists.
The company said it was on track to meet full-year revenue
and profit targets, led by mid single-digit growth across its
health and hygiene businesses.
"We could expect the share price to outperform peers today,
somewhat constrained by the ongoing litigation uncertainty,"
Jefferies analyst David Hayes said.
Reckitt's quarterly like-for-like net sales rose 1.5%,
against 0.9% growth expected by analysts in a poll by the
company.
"We continue to benefit from carryover pricing and consumers
trading up to our premium innovations," Licht said.
Consumer companies from Reckitt to Nestle have
invested heavily in product innovation to win back shoppers who
had turned to cheaper brands during the COVID-19 pandemic and
more recent cost-of-living crisis.
They hope improvements to existing products will allow them
to raise prices without taking a hit on sales volumes.
Reckitt's other products include Nurofen tablets, cold
remedy Lemsip and Durex condoms.
The company said first-quarter volumes rose 2.9% at the
company's hygiene business - its largest by revenue - but the
price/mix metric that shows how much its products sold for rose
by 4.2%.
Its overall price/mix ratio rose 2% while volumes declined
by 0.5%. Analysts had expected a 2.2% price/mix gain and volumes
to decrease by 3.2%.