Reckitt Benckiser – Guidance Raised As Cost Inflation Lingers

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Reckitt Benckiser – Guidance Raised As Cost Inflation Lingers
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Reckitt Benckiser Group Plc (LON:RKT)’s third quarter like-for-like (LFL) revenue rose 3.3%, with net revenue reaching £3.3bn. Trading has been better than Reckitt expected.

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Growth came from a balance between volume and price increases, while LFLs were up in all divisions and geographies, with North America the strongest region.

Full year guidance has been upgraded, with revenue expected to grow 1-3%. Despite ongoing cost inflation, margin guidance remains unchanged.

The shares were up 5% following the announcement.

Reckitt Benckiser Sees Improvement In Q3 Sales

Matt Britzman, Equity Analyst at Hargreaves Lansdown:

“Increased demand for cold and flu remedies gave sales a kick in the right direction in the third quarter, which contributed to better than expected results and prompted management to raise revenue guidance for the full year.

Margin guidance remained unchanged, and with revenue expectations up, this suggests costs are expected to keep rising into the fourth quarter. So far, the group has been able to raise prices without a material impact on sales volumes. It’s a fine balancing act that Reckitt executed well last quarter.

News that Dettol volumes, whilst normalising, are still significantly above 2019 levels suggest increased hygiene awareness isn’t a trend that’s going anywhere soon. Positive news for the group, and with the sale of the underperforming Chinese Infant Child Nutrition business now behind them, the outlook is starting to look brighter.”


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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