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Reckitt beats like-for-like sales estimates, driven by Dettol, Lysol
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Reckitt beats like-for-like sales estimates, driven by Dettol, Lysol
Apr 24, 2024 12:48 AM

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%.

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