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Reckitt sees fastest sales growth in decade on disinfectants
[LONDON] Reckitt Benckiser Group forecast the fastest revenue growth in at least a decade as the Lysol disinfectant maker benefits from higher standards of hygiene amid the pandemic.
Sales should increase at a low double-digit rate this year on a like-for-like basis, the company said on Tuesday. The previous outlook was for high-single digit growth. The stock rose as much as 2.8 per cent.
The pandemic is creating new consumer habits that on the whole are benefiting Reckitt. Sales of hygiene products rose 20 per cent for the third quarter as the company introduces its cleansers in 19 new markets this year. Reckitt has also seen growth in vitamins and supplements.
However, the company said there's some signs that birth rates are declining, which could dent its infant formula business. Also, Durex condom sales have suffered as social distancing reduces opportunities for dating and social interactions. Still, some markets had improvement.
The maker of Strepsils also continues to expect weak demand for over-the-counter flu and cold medicines as consumers adhere to social distancing measures, leading to fewer cases of such illnesses.
Comparable sales rose 13 per cent for the third quarter. Analysts expected 8.6 per cent growth.