Reckitt Benckiser (RB) has reported flat like-for-like sales for the first quarter of the year, hurt by ongoing market weakness in Europe and North America, the South Korea safety issue, and weaker performance of a new Scholl product.
However, total reported sales climbed 15% to £2.64bn in the three months to 31 March with the company saying that underlying sales should improve over the course of the year and it was standing by its target for full-year like-for-like sales growth of 3%.
Within the first quarter figures – which RB said were in line with expectations – the group‘s hygiene division grew like-for-like sales by 3%. Like-for-like sales in its Health division were unchanged, whilst its Home brands saw sales fall 4%. Food sales were up 3%.
As announced earlier this month, RB reiterated that it was undertaking a strategic review of its non-core Food business. It said it was exploring a range of options for its food business, which centres around French’s mustard and Frank’s RedHot sauce, before reaching any decision and would update the market when appropriate.
Meanwhile, RB said its $16.6bn deal to buy Mead Johnson, agreed earlier this year, was on track for completion by the end of its third quarter.
Commenting on the results, RB’s Chief Executive, Rakesh Kapoor, said: “Our Q1 results are in line with expectations as macro conditions remain challenging. Against this backdrop our underlying business remains strong. We delivered continued outperformance in consumer health and good growth in DvM, offset by previously flagged headwinds, which will persist during the first half. I expect our growth trajectory to improve as we progress through the year and we remain on track to achieve our full year net revenue target of +3% LFL growth.”