- The consumer goods giant’s products include Lysol, Lemsip and Nurofen.
- Reckitt was also boosted by higher sales in Europe and developing markets.
Reckitt Benckiser shares rose on Wednesday after the consumer goods giant’s sales beat forecasts following strong demand for its cleaning products in the first quarter.
The group, whose brands include Lemsip and Nurofen, reported comparable net turnover growth of 1.5 percent for the first three months of 2024, beating analyst forecasts of -0.9 percent.
The growth was primarily driven by its hygiene business, which saw revenue increase 7.1 percent, thanks to higher sales of Finish dishwasher detergent and Lysol disinfectant brand.
Better than expected: Reckitt Benckiser, whose brands include Lemsip and Nurofen, reported comparable net sales rose 1.5 percent in the first three months of 2024
Reckitt was also boosted by rising sales in Europe and developing markets such as China and South Asia, as well as growing volumes of Durex, Dettol and non-seasonal over-the-counter brands in its health division.
This offset weakening trade in its nutrition division as a result of Abbott Laboratories, a major US competitor, resolving supply chain issues related to the production of baby formula.
When measuring currency fluctuations, the Slough-based company’s first-quarter turnover fell 4.6 per cent to £3.74bn.
Reckitt Benckiser Group Shares rose 4.5 per cent to £44.41 at lunchtime on Wednesday, making it the second biggest riser on the FTSE 100 index.
However, shares have still fallen by about a quarter in the past six months due to compliance issues in two Middle Eastern markets and controversy over its baby formula products.
Last month, a US court ordered the company to pay $60m (£47m) to a mother who said her premature baby died after consuming Enfamil baby formula.
Reckitt rejected the verdict and vowed to continue selling Enfamil, made by Mead Johnson, a company it acquired in 2017 for $17.9 billion.
Mead Johnson has also said he plans to appeal the decision.
Enfamil sales soared in 2022 when Abbott was forced to close its Michigan plant due to flooding and the discovery of bacteria, causing a shortage of baby formula in the United States.
The U.S. government later authorized Reckitt to import formula from its manufacturing facilities in Mexico and Singapore.
Kris Licht, CEO of Reckitt Benckiser, said: “We are well positioned to create value by leveraging our strong portfolio of brands through investment and innovation.
“This drives our continued strong free cash flow generation, our accelerated share repurchase program and increased cash returns to shareholders.”
For 2024, Reckitt expects comparable net income to increase between 2 and 4 percent, while adjusted operating profits will “grow ahead” of revenue.