Shares in consumer health giant Haleon took a hit this week after sales volumes went backwards in the early months of 2024 to undershoot expectations.

Overall organic revenues at the Sensodyne owner were up 3% in the quarter. The company’s ‘power brands’ posted organic revenue growth of 5.2%, with particular strength from Sensodyne, Polident/Poligrip and Centrum.

However, the overall rise was driven by pricing, with prices up 5% as volume/mix declined by 2%.

Haleon said pricing gains were driven by both previous price increases and incremental price taken during the quarter.

The slide in volumes, meanwhile, was attributed to tough prior year comparatives – particularly related to Fenbid and Contac in China, Advil in Canada and a strong cold and flu season in the corresponding period of 2023.

Headline revenues declined 2.2% to £2.92bn in the quarter as foreign exchange reduced sales by 4.6% and M&A by 0.6%.

The bottom line picture was rosier, with organic profits up 12.8% driven by gross margin expansion and cost efficiencies. Adjusted operating profit margin of 24.2% was up 220bps organically.

Despite a “challenging” operating environment and weaker first quarter growth, the group reiterated full year guidance of organic revenue growth of 4%-6% and organic operating profit growth ahead of organic revenue gains.

Haleon shares fell back by 2.5% on the news to 331p as it undershot consensus forecasts with the weaker-than-expected volumes.

It was “a bad time to be showing negative volumes these days”, said Bernstein analyst Bruno Monteyne. But he argued Haleon’s issues were not “because of a bifurcated consumer, downtrading or weak sector volumes” – pointing instead to “wild swings” in pain relief in China and Canada last year and some destocking.

Highlighting strong volume growth in its key categories of oral health and vitamins, minerals and supplements, he said the group had posted “strong beats where it matters” and the results “strengthened confidence in those engines being ahead of expectations”.

Steve Clayton, head of equity funds at Hargreaves Lansdown, added: “The rest of the year gets easier on paper, as the comparatives improve… This defensive growth is especially attractive at a time when economies are struggling to make headway.”“The combination of operating margin leverage, plus financial de-leverage, should drive earnings well ahead of Haleon’s underlying revenue growth for some years to come.”

Haleon shares are around 7% down year on year, but have crept up 1.2% so far this year.