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Reckitt Benckiser affirms targets after strong first-quarter
[LONDON] Reckitt Benckiser affirmed its full-year forecast after reporting slightly better-than-expected sales on Monday, helped by its consumer health business.
The British maker of Mucinex cold medicine, Dettol soaps and Durex condoms said that like-for-like sales rose 5 per cent in the first quarter. Analysts on average were expecting an increase of 4.9 per cent.
Reckitt's health business saw sales jump 10 per cent, ahead of expectations for growth of 7.4 per cent, according to Canaccord Genuity analysts. This was despite pockets of weakness, such as retailers destocking in Russia and the United States after a late start to the flu season.
It is the unit's fifth straight quarter of double-digit growth. The unit is benefiting from aging populations and urbanisation and increasing interest in health and wellness.
Reckitt said it is still on track for full-year group sales growth of 4 per cent to 5 per cent and for its operating margin to expand at a "moderate" rate in the medium term.
The company said foreign currency exchange rates would be a 5 per cent tailwind this year, if rates stay as they were at the end of March.
Reckitt shares, which trade at nearly 25 times its estimated 2016 earnings, were up less than 1 per cent at 0910 GMT.