Reckitt surpasses sales projections thanks to increased prices and sales of infant formula.
Reuters: London-based Dettol and Lysol cleaning product manufacturer Reckitt Benckiser of Britain slightly surpassed full-year like-for-like net revenue expectations on Wednesday, aided by higher prices and its nutrition and health businesses.
The business stated that it would aim for like-for-like net revenue growth in the mid-single digits for 2023, excluding the sizable boost in sales that the recall of a rival’s baby formula gave its 2022 sales.
Following consumer complaints that their infants were getting bacterial infections, Abbott Laboratories (NYSE:ABT) recalled dozens of baby nutrition items in the United States at the beginning of last year.
The company’s largest competitor at the time, Reckitt, increased production to close the supply gap left by Abbott, which contributed to the nutrition business’s full-year like-for-like net sales growth of about 23%.
According to Reckitt, the shortage’s effects increased the unit’s development by about 17.5%.
Reckitt’s products, which include Durex condoms, Lemsip cold medicine, and Nurofen tablets, saw an overall price/mix increase of 9.8%, helping the company make up for a 2.2% drop in sales volumes resulting from its operations in North America.
Consumer goods companies, including Procter & Gamble (NYSE: PG), Unilever (NYSE: UL), and Clorox (NYSE: CLX), have been raising prices for several quarters to offset increasing energy, raw material, and supply chain costs.
Some customers are abandoning major brands in favour of cheaper private label goods produced by retailers like Walmart (NYSE:WMT), Tesco (OTC:TSCDY), and Carrefour as a result of rising prices (EPA:CARR).
However, Reckitt executives claimed that price increases would be “much” lower this year because commodity prices “have peaked” in a conference call with journalists.
Nicandro Durante, interim chief executive of Reckitt, continued, “We believe input costs will be somewhere in the single-digit level for 2023 instead of 17%.”
According to a company-provided consensus, the company reported that full-year like-for-like net revenue rose by 7.6% to $13.66 billion pounds ($16.47 billion), edging out analysts’ forecasts of a 7.5% rise.
Reckitt set a 6% to 8% like-for-like net revenue increase goal for 2022.
Adjusted profits for the entire year increased by 16.8% to 3.44 billion pounds.
Beiersdorf, the company that makes Nivea, stated on Wednesday that it anticipates organic sales growth to moderate this year to a mid-single-digit range after posting double-digit growth for the first time in 20 years in 2022 due to strong demand for its skin care products.
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