Reckitt Benckiser has beaten market expectations for growth, as soaring emerging market sales help cement the victory of the group’s turnaround plans.
Delivering 6.7% like-for-like growth in its Core Brands portfolio – identified in the mid-2024 turnaround plan – Reckitt outperformed market consensus of 5.4% in the three months to 30 September.
Emerging markets were the powerhouse behind Reckitt’s new momentum, as like-for-like sales jumped 15.5% on Q3 2024. Growth in China is estimated by analysts to be more than 30%.
Europe also returned to like-for-like growth, jumping by 0.8% – though the year-to-date performance remained negative at -0.3% – alongside North America, which rose to 1.3%. North America remained at -0.7% in the year to date.
Despite tougher trading in South America and a temporary headwind from India’s new goods and services tax, Reckitt’s strong performance is a “big boost to credibility”, according to Jefferies analyst David Hayes.
Now that developed markets are contributing growth, Hayes said, Reckitt has presented investors a “complete delivery”.
He added: “We expect Reckitt to be rewarded this morning, and peers to ask: ‘how are they doing it?’”
Shares in Reckitt lifted by almost 1% as markets opened this morning but have pared back to just 0.3% higher this afternoon. The stock is up 21% in the year to date.
Reckitt CEO Kris Licht said the company’s results reflected “sequential volume improvements and the strength of its powerbrands”.
“We returned to growth in developed markets against a challenging consumer landscape and continued to deliver outsized growth in emerging markets.
“With our sharpened operating structure, we are executing our plan and progressing our strategic objectives to be a world-class consumer health and hygiene company. We are pleased with our performance and we are confident in delivering our full-year 2025 guidance.”
Reckitt’s Mead Johnson Nutrition business supported core Reckitt’s growth with 22% like-for-like revenue growth, as it lapped the “significant impact” of the July 2024 tornado.
Barclays analyst Laurence Whyatt said he “doubted any European staples peers will deliver better than Reckitt’s group like-for-likes”.
While the beat was less of a surprise than last quarter, and the North America and Europe segments might still be criticised as “not quite as good as expected”, he felt such criticism would be “nitpicking”.
“The only slight negative was the lowered guidance for Essential Home, but it does little to take the gloss off another good print on the core – especially in volume terms,” Whyatt added.
Reckitt agreed the sale of its Essential Home business, which included brands such as Cillit Bang and Air Wick, in July 2025 for up to $4.8bn.
Expected to complete by 31 December, the sale to PE firm Advent International will leave Reckitt with a 30% stake in the non-core business.
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