Shares in Reckitt Benckiser (LON:RB) rallied on Thursday as the FTSE 100 consumer group said they had a bumper first quarter driven by a jump in sales of hygiene products.
The Reckitt Benckiser share price rose over 4% to 6.679p, their highest level in 2020.
Reckitt Benckiser is one of only 12 companies in the FTSE 100 with shares in positive territory for 2020.
Group like-for-like sales increased by 13.3% in the first quarter as consumer stocked up on brands including Dettol, Lysol, Mucinex and Nurofen.
Reckitt Benckiser also enjoyed a 50% jump in online sales as consumer followed the ‘stay home’ guidance from governments.
However, the future performance of RB’s sales was unclear as sales may tail off after consumers stocked up on goods that may not necessarily need to be replaced.
Despite doubts surrounding the continuation of sales through 2020, RB said they had increases expectations for their full year performance after the strong first quarter.
Reckitt’s will provide further guidance in the half-year report.
Laxman Narasimhan, Chief Executive Officer of Reckitt Benckiser, commented on the results:
“We have seen strong consumer demand, particularly in March and April but the split between defensive buying and higher levels of underlying consumption is unclear. At this stage, it is uncertain how quickly this will change in the months ahead. Improved penetration and usage, particularly for products like Dettol and Lysol, may well sustain, although we will likely see some unwinding of ‘pantry load’ as we work our way through the crisis. The near- term operational challenges to meet additional demand and handle lockdown conditions, with the associated costs, are also likely to continue for some time.”
“As we set out in February, this is a good house in a great neighbourhood. There are four long-term trends that are shaping our business. Urbanisation and global warming continue to drive hygiene as the foundation of health.”
“Pressures on state-funded healthcare are growing demand for self-care. Sexual health and well-being are big societal issues that are growing demand for effective protection and related products. And an ageing and growing population is driving demand for personalised infant and adult nutrition. At the same time, technology and e-commerce are changing the way consumers know both what and how to buy, and where to look for information and advice.”
“Against this positive environment, we are making good strategic progress to position our business for success. I am heartened that the ambitions we have outlined to rejuvenate RB have gained support throughout the business. As a result, we are already executing our plan and making progress during this transformational year – one that lays the foundations for our success in the future; investing in our people, brands and operations, improving delivery performance and increasing productivity.”