Reckitt raises its sales projection based on price increases and infant formula

The British producer of Dettol and Lysol cleaning products, Reckitt Benckiser, increased its full-year revenue forecast on Wednesday after major price hikes helped it meet second-quarter sales projections.

Reckitt Benckiser, the British manufacturer of Dettol and Lysol cleaning products, boosted its full-year revenue prediction on Wednesday after significant price increases helped it surpass second-quarter sales expectations.

The firm’s quarterly like-for-like sales increased by 11.9% on a constant currency basis, far above the 6.8% rise analysts predicted in a survey conducted by the company. Reckitt increased its pricing by 9.7 percent during the quarter, while its revenues increased by 2.2 percent.

After market leader Abbott Laboratories (NYSE:ABT) recalled dozens of brands in February, Enfamil infant formula sales boosted quarterly revenue by around 3.3% due to a scarcity of supply in the United States.

Reckitt, formerly the second-largest participant in the $4.8 billion-a-year U.S. baby formula business, has since assumed the top position and now feeds about half of the nation’s newborns.

Laxmi Narasimhan, chief executive officer, remarked, “The supply issue has aided us in terms of our total market share.” We will have some normalization when a rival returns to the market, but our company has the most recommended brand.

“The Abbott product withdrawal definitely increased the figures and was difficult to predict, but the business also outperformed expectations in other segments, such as hygiene and health,” said Bernstein analyst Bruno Monteyne.

In early trade, Reckitt shares rose more than 5 percent.


Competitor Unilever (NYSE:UL) also upped its full-year sales guide on Tuesday after topping first-half underlying sales estimates, as the manufacturer of Dove soap and Knorr stock cubes increased pricing to offset rising costs.

Reckitt stated that it now anticipates like-for-like net sales growth of 5 to 8 percent in 2022, as well as an expansion in adjusted operating margins. In April, the company projected net sales growth in the higher portion of the 1 to 4 percent range and margins comparable to the previous year.

“Many prominent brands, including as Finish and Vanish, are expanding at double-digit rates. Regarding health, our OTC performance has been excellent across the board, and our intimate wellness brand is performing well “Jeff Carr, the head of finance at Reckitt, stated.

Reckitt, whose products include include Nurofen medicines, Durex condoms, and Strepsils cough lozenges, is among the several packaged goods firms that have faced with increasing input prices since the outbreak of COVID-19.

Supply chain bottlenecks at major ports and increasing energy costs as a result of the Ukraine-Russia conflict have further exacerbated the situation, resulting in record-high prices for essential raw commodities such as palm oil, pulp, and plastic.

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