Reckitt Benckiser Misses Expectations In Q1
British consumer goods company Reckitt Benckiser lagged in sales compared to its peers in the first quarter as further falls in Scholl footcare and lower prices hit its sales growth.
Bernstein analysts said Reckitt's like-for-like sales growth was "bottom of class" of the five European food and packaged goods companies that have reported quarterly sales so far, and it shares fell 5% on Friday to their lowest level since August 2015.
Nestlé, Procter & Gamble and Unilever also saw very little first-quarter pricing growth as packaged goods makers face pressure from retailers fighting off drug store chains and e-commerce giant Amazon.
Reckitt, which makes Durex condoms, Lysol disinfectant and Mucinex cold medicine said like-for-like sales rose 2% in the first quarter, below analysts' average estimate of 2.6%, according to a company-supplied consensus.
Volume was up 3%, implying that overall pricing had a negative 1% impact, which was worse than what Nestlé and Unilever experienced.
"This year's earlier Easter doesn't seem to have helped Q1's performance – or if it has, the underlying picture is pretty grim, in our view," analysts at RBC Capital markets said.
Reckitt's health-related products, which make up 62% of the business, saw like-for-like sales up just 1%, held back by a 2% drag from Scholl, which has struggled for two years in the wake of a failed product launch.
"We are addressing our performance in Scholl through acceleration of our pipeline, penetration improvement programmes and streamlining our range," Reckitt said in a statement.
Sales in the smaller home and hygiene business rose 4%.
Reported sales were £3.11 billion (€3.55 billion), just shy of the £3.12 billion in analysts' consensus.
The company said it still expects 2018 revenue up 13% to 14%, with like-for-like sales up 2% to 3%. That would be an improvement from flat sales growth in 2017, due to a spate of issues from a product failure to a cyber attack.