Reckitt Benckiser Cuts Full-Year Forecast Again As New CEO Takes Over
British household goods maker Reckitt Benckiser has cut its full-year sales forecast for the second time this year, blaming a drop in retail orders for Mucinex in the United States and a drop in demand for its Enfamil baby products in China.
The Durex condom and Lysol disinfectant maker said on Tuesday it now expected full-year like for like sales growth to range from flat to up 2%, down from its previous target of 2% to 3%, which marked its second forecast cut this year.
The company also said it expected to see a modest decline in adjusted operating margins for the year as it pours more money into its brands. The company had earlier expected margins to be at the same level as last year.
Reported sales rose 5.3% in the third quarter to 3.29 billion pounds ($4.3 billion), missing analysts' forecast of 3.32 billion pounds, according to a company supplied consensus.
Reckitt blamed cautious purchasing of its Mucinex and Delsym cold and flu products by U.S. retailers ahead of the flu season and a drop in demand for its Enfamil baby food products in China for its weak performance in the three month period .
The quarterly report is the first for new Chief Executive Laxman Narsimhan who in September took over from long-time CEO Rakesh Kapoor.
“RB’s performance in Q3 was disappointing," Narsimhan commented. "This performance is a reflection of an extended period of significant change and disruption in the company. I am prioritising execution and operational performance as a matter of urgency."