Reckitt cuts full-year sales outlook after weaker third quarter

(Sharecast News) - Reckitt Benckiser cut its full-year sales growth guidance on Tuesday after third-quarter trading fell short of expectations, hit by manufacturing constraints in North America and weaker demand for vitamins and supplements in China.

The FTSE 100 consumer goods group said like-for-like revenue at its core business rose 3.3% to £2.69bn in the three months to 30 September, below the company-compiled consensus forecast of 3.6%.

It now expects full-year core revenue growth of 3.5% to 4.5%, down from its previous forecast of 4% to 5%.

Emerging markets remained the strongest-performing region, with like-for-like sales rising 8% to £1.17bn, supported by double-digit growth in India, southeast Asia and Africa.

Europe returned to growth, with revenue up 0.8% to £867m, driven by improved performances from brands including Gaviscon, Vanish and Durex.

However, North American sales fell 1.3% to £649m as temporary manufacturing constraints restricted Lysol supplies, despite strong consumer demand. Trading was also affected by weaker consumer spending and tougher comparisons for Mucinex.

Chief executive Kris Licht said the company was delivering good underlying performance despite a challenging consumer environment, but acknowledged that North America had fallen short of expectations.

Reckitt said it expected a recovery in North America during the fourth quarter, supported by improved Lysol supply and stronger seasonal cold and flu demand.

The company maintained its full-year adjusted operating margin guidance of 24.9% to 25.6%.

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