The company said it generated adjusted earnings per share of 4.2 pence on revenue of nearly £3 billion (€3.4 billion)
That compared with analyst expectations for quarterly profit of 5.24 pence per share profit on revenue of about £2.9 billion (€3.29 billion), Refinitiv data shows.
Reported revenue for the period was 13.7% higher, or +9.9% on an organic basis, driven by price of +7.1% and positive volume/mix of +2.8%.
Adjusted Profit Margin
London-listed Haleon, which was carved out as an independent company in July and comprises consumer health assets once owned by GSK and Pfizer, said its adjusted profit margin fell over the quarter mainly because of 'cost inflation and incremental standalone costs'.
Haleon last month said it expected to be closer to the upper range of its predicted 2023 growth of 4-6%.
'A Healthy Balance'
“The new year has started well, and I am particularly pleased that we delivered a healthy balance of positive volume mix and price in the first quarter; demonstrating the strength of the brand portfolio combined with exceptional execution across our markets," commented Brian McNamara, chief executive.
"Our strategy is delivering strong growth and our Q1 performance reinforces my confidence in our ability to deliver. Strong innovation and a continued focus on cost discipline underpins this confidence."
“Only someone who had spent the last 18 months living in a cave would be unaware of the inflationary pressures facing all businesses. However, the drop in Haleon’s profitability suggests it has struggled to pass increased prices on to consumers. Or it has made the decision to preserve volumes over protecting its margins.
“There is no right or wrong answer to this conundrum, but it may see investors reappraise the business and suggests the competitive threat posed by own-brand alternatives is a real one.
“Another issue weighing on the shares is news Pfizer will start selling down its 32% stake within months. While the US drugmaker says it will do this in a slow and strategic way, it represents a pretty big overhang for Haleon.”