Reckitt Benckiser Warns of Potential Delays in NonCore Brand Sales as Market Conditions Tighten

Consumer goods giant Reckitt Benckiser has signalled potential delays in its planned divestment of homecare brands, citing challenging market conditions amid weaker-than-anticipated first-quarter performance. The company’s chief executive, Kris Licht, acknowledged the increasingly complex environment for executing transactions in the current market landscape.

The FTSE 100 company reported net revenues of £3.68 billion, representing a modest 1.1% like-for-like increase, falling short of analysts’ expectations of 1.4%. The essential home business unit, comprising 13% of group sales, experienced a concerning 7% decline in like-for-like sales during the first quarter.

Market headwinds have been particularly strong in North America and Europe, where declining consumer confidence has led to volume reductions of 1.9%. The company’s share price responded negatively to the news, dropping 5.6% to £46.71, positioning Reckitt among the day’s largest fallers on the FTSE 100.

Despite these challenges, Reckitt maintains its full-year guidance of 2-4% like-for-like net sales growth, with performance expected to be weighted towards the second half. The company’s emerging markets division has shown remarkable resilience, posting 10.7% growth in the quarter, helping to offset weaknesses in other regions.

The restructuring initiative, announced last July, aims to streamline operations by divesting non-core brands such as Mr Sheen and Air Wick, while conducting a strategic review of Mead Johnson. The company plans to focus on high-growth, high-margin power brands including Mucinex, Gaviscon, Nurofen, and Durex following the reorganisation.

The Slough-based manufacturer remains optimistic about managing potential impacts from international trade tensions, citing minimal exposure to US-China trade flows and various mitigation strategies, including manufacturing investments and pricing power leverage.