Haleon reported slower-than-expected third-quarter revenue growth as a weak cold and flu season and a regulatory issue in China held back the consumer health company.
The maker of Sensodyne toothpaste and Centrum vitamins said organic revenue grew 2.6% in the quarter, below expectations, with most growth coming from price rather than volume.
The battle between volume and price for a consumer goods company’s sales growth has been alive and well in the recent earnings season, and investors may be disappointed to see Haleon’s volume stutter.
Its oral health business was a bright spot, up 8.8%, but demand for cough, cold and flu products was soft, particularly in North America, and it had to halt imports of some Centrum products in China after a change in how a raw material was classified.
The company trimmed its full-year revenue growth guidance to around 2.5%, while maintaining its profit guidance, citing strong margins and cash generation. It announced a further £500m share buyback. Chief executive Brian McNamara said his priority was to drive stronger volume growth and return the business to consistent delivery.
Brian McNamara, Chief Executive Officer, said: “Our third quarter organic revenue growth of 2.6% was below our expectations as we navigated softness across some of our categories including weaker cough, cold and flu consumption. We delivered strong performances in Oral Health and our turnaround plan in North America continues to make progress. We are clear on where we need to improve and we are taking action to deliver stronger performance despite challenging markets.”