On Wednesday, Reckitt Benckiser, a company known for its products such as Vannish, Air Wick, Dettol, and Strespsils, released the Q3 report, highlighting significant revenue growth difficulties, especially in Hygiene.
The net revenue witnessed a positive like-for-like revenue growth of 3.4%, driven by a robust and widespread expansion of 6.7% across the hygiene and health segments combined.
However, the impact of adverse currency swings meant that reported revenue fell 3.6%. Group volumes slipped 4.1% in the third quarter.
Reckitt Benckiser shares were down 5% at the time of writing.
Within the nutrition sector, there was a revenue drop of 11.9%.
Hygiene achieved a noteworthy net revenue growth of 8.1% on a like-for-like basis. This substantial expansion was driven by across-the-board growth in all primary categories, propelled by double-digit increases in both Finish and Vanish.
While Reckitt’s Nutrition Products continues to maintain its leadership position in the US market, it also successfully navigated past a supply issue experienced by a competitor in the previous year.
Health experienced a like-for-like net revenue growth of 5.4%. The growth was primarily fueled by the OTC (over-the-counter) and intimate wellness portfolios, while Dettol and VMS (vitamins, minerals, and supplements) remained generally stable.
Danni Hewson, the head of financial analysis at AJ Bell, said in a comment to UK Investor Magazine that “to be fair, nutrition is suffering in comparison with the same period last year when a US competitor faced temporary supply issues with its infant formula, but the specialist in health and hygiene branded goods saw a pretty significant drop in volumes across the board, compensated for by rising prices.”
Danni Hewson added that “There may be concern in the market that this reflects a shift in consumer behavior with people switching out of the likes of Nurofen and Finish dishwasher tablets into own-brand alternatives. While for drinks, snacks, and other food items people might be willing to push the boat out and still buy their favourite brands, can the same hold true for cleaning products and over-the-counter medicine? If not, then Reckitt risks losing any reputation for pricing power.”