Enfamil Maker Reckitt Boosted by U.S. Demand for Infant Formula

In response, Reckitt has been importing extra supplies of infant formula into the U.S. and has significantly increased its market share. On Wednesday, Reckitt reported a 26.8% jump in second-quarter like-for-like sales at its nutrition division. It said much of that growth was down to substitution purchases and consumers stockpiling formula as well as good growth in Latin America and parts of Asia.

While Reckitt expects formula shortages to ease in the coming weeks, it said it still expects to end the year with a larger, stronger formula business in the U.S.

Overall, Reckitt reported second-quarter like-for-like sales growth of 11.9%. The figure includes an estimated 3.3% benefit from what it described as temporary competitor supply issues in U.S. nutrition.

Higher prices made up 9.7% of its overall sales growth, with volumes rising 2.2% as shoppers continued to pay more for its brands.

Reckitt’s results come after rival

Unilever

PLC on Tuesday reported lower volumes across all its major categories as price rises caused shoppers to pull back. By contrast Reckitt, which sells a narrower range of more specialized products, said it is seeing less downgrading, although like Unilever it too has ceded some share to private-label brands in Europe.

The company raised its like-for-like revenue growth guidance for the year, now expecting between 5% and 8% from previous guidance of growth toward the upper end of a 1% to 4% range.

Reckitt didn’t give profit figures for the second quarter but reported a first-half profit of 1.36 billion pounds, equivalent to about $1.63 billion. That compares with a loss of £1.72 billion in the same period last year when results were hit by a write down related to the sale of its formula business in China.

Shares were up 4.5% in morning trading in London.

Apart from strong growth from formula, Reckitt benefited from strong demand for over-the-counter medicines. Sales of cough and cold products were buoyed by the Omicron variant of Covid-19 and a stronger cold and flu season following the easing of social-distancing measures that were in place in many countries last year.

Reckitt also flagged brands including Finish dishwasher tablets, Harpic toilet cleaner, Vanish detergent and Nurofen painkillers as having done well.

Strong sales of those products helped offset weaker demand for Lysol cleaners. During the pandemic, consumers cleaned their homes more but demand has since ebbed with Lysol sales down 30% in the second quarter.

However, Reckitt said sales of the brand remain 50% higher than prepandemic levels and the company has been trying to sustain momentum by pushing into new categories such as laundry sanitizers and on-the-go hand sanitizers.

Write to Saabira Chaudhuri at [email protected]

In response, Reckitt has been importing extra supplies of infant formula into the U.S. and has significantly increased its market share. On Wednesday, Reckitt reported a 26.8% jump in second-quarter like-for-like sales at its nutrition division. It said much of that growth was down to substitution purchases and consumers stockpiling formula as well as good growth in Latin America and parts of Asia.

While Reckitt expects formula shortages to ease in the coming weeks, it said it still expects to end the year with a larger, stronger formula business in the U.S.

Overall, Reckitt reported second-quarter like-for-like sales growth of 11.9%. The figure includes an estimated 3.3% benefit from what it described as temporary competitor supply issues in U.S. nutrition.

Higher prices made up 9.7% of its overall sales growth, with volumes rising 2.2% as shoppers continued to pay more for its brands.

Reckitt’s results come after rival

Unilever

PLC on Tuesday reported lower volumes across all its major categories as price rises caused shoppers to pull back. By contrast Reckitt, which sells a narrower range of more specialized products, said it is seeing less downgrading, although like Unilever it too has ceded some share to private-label brands in Europe.

The company raised its like-for-like revenue growth guidance for the year, now expecting between 5% and 8% from previous guidance of growth toward the upper end of a 1% to 4% range.

Reckitt didn’t give profit figures for the second quarter but reported a first-half profit of 1.36 billion pounds, equivalent to about $1.63 billion. That compares with a loss of £1.72 billion in the same period last year when results were hit by a write down related to the sale of its formula business in China.

Shares were up 4.5% in morning trading in London.

Apart from strong growth from formula, Reckitt benefited from strong demand for over-the-counter medicines. Sales of cough and cold products were buoyed by the Omicron variant of Covid-19 and a stronger cold and flu season following the easing of social-distancing measures that were in place in many countries last year.

Reckitt also flagged brands including Finish dishwasher tablets, Harpic toilet cleaner, Vanish detergent and Nurofen painkillers as having done well.

Strong sales of those products helped offset weaker demand for Lysol cleaners. During the pandemic, consumers cleaned their homes more but demand has since ebbed with Lysol sales down 30% in the second quarter.

However, Reckitt said sales of the brand remain 50% higher than prepandemic levels and the company has been trying to sustain momentum by pushing into new categories such as laundry sanitizers and on-the-go hand sanitizers.

Write to Saabira Chaudhuri at [email protected]