Reckitt Benckiser (RB.) has cut its full-year sales guidance for the second time in less than three months following what chief executive Laxman Narasimhan called a “disappointing” third quarter. Net revenue growth is now expected to be up 2 per cent at best or flat, a reduction on the 2-3 per cent increase anticipated at the time of first-half results in July. In May, management had reiterated a sales growth target of between 3 and 4 per cent for 2019.
This poor third-quarter performance was attributed to slower retail purchasing patterns in the US and challenging market conditions for infant care products in China as the birth rate slows. This led to a 4 per cent decline in underlying sales growth during the three months to the end of September.
Mr Narasimhan said Reckitt’s performance is “a reflection of an extended period of significant change and disruption” at the company. The chief executive only took up the position in July, while it was announced on 21 October that Jeff Carr would take over as chief financial officer in April next year. Mr Narasimhan said he will be prioritising operational performance and execution “as a matter of urgency”. Encouragingly, the hygiene home business performed more strongly, with underlying revenue growth of 4.5 per cent on a like-for-like basis.