Reckitt shares lift after Dettol and Durex help sales growth

Consumer goods giant Reckitt revealed stronger-than-expected sales for the past quarter, as it cheered growth for brands including Dettol, Durex and Finish.

Shares in Reckitt climbed in early trading as investors also welcomed reassurance from bosses over US litigation related to its premature baby formula business.

It comes after the firm’s stock had dropped by around a third over the past 12 months amid pressure from shoppers opting for cheaper, supermarket own-brand alternatives.

The company, which also makes Nurofen and Strepsils, said on Wednesday that group like-for-like sales grew by 1.5% to £3.73 billion over the first quarter of 2024.

Nevertheless, sales volumes dipped slightly by 0.5% as higher pricing continued to support growth.

Kris Licht, chief executive officer, stressed that it represented a “good” quarter for the business and said it is “returning to a more balanced contribution from price, mix and volume” amid easing inflation.

The firm’s hygiene operation saw sales grow by 7.1% for the quarter, with sales volumes up 2.9%.

Key Reckitt brands such as Lysol, Dettol, Durex and Finish all sold higher volumes over the period.

The company’s nutrition operation remained its weakest performing area, with sales down 9.9% amid a 9.4% drop in volumes bought by shoppers.

This was partly linked to a boost in the previous year after supply issues at a major competitor.

The firm’s nutrition business has also come under pressure over potential large liabilities from lawsuits in the US related to its Enfamil Premature 24 baby formula, following a ruling in Illinois last month.

The company, which has rejected the ruling, has vowed it will continue to sell the products and said the US nutrition business is still performing well.

Mr Licht added: “We are well placed to deliver value creation by leveraging our strong portfolio of brands through investment and innovation.

“This drives our continued strong free cashflow generation, our accelerated share buyback programme and increased cash returns to shareholders.”

Reckitt shares were 4.8% higher at 4,453p on Wednesday morning.