Reckitt Benckiser hikes full-year revenue target

Consumer goods group Reckitt Benckiser lifted its full-year like-for-like sales growth estimate to 5% from a previous range of between 4% and 5% as it posted better-than-expected third-quarter revenue.

The company reported third-quarter LFL growth of 7% to £2.20bn, topping analysts’ expectations of around 5.2%. On actual exchange rates, however, revenue dropped 1%.

Europe, North American and Australia and New Zealand saw broad-based growth across all key geographies, helped by a weak comparator in North America, while developing markets saw continued strength in India and China, although Brazil remained challenging.

Chief executive officer Rakesh Kapoor said: “Our strategy for growth and outperformance, focused on Powermarkets and Powerbrands continues to deliver.

“In the third quarter we achieved continued broad-based growth throughout our European and North American Powermarkets, and double-digit growth in developing markets. Health and Hygiene brands had an excellent quarter with 8% growth, driven by innovations and continued penetration building programmes.”

The company said markets remain challenging, but with 6% LFL growth on a year-to-date basis, it was able to raise its full-year revenue target and remains poised for another year of growth and margin expansion.

Nomura, which rates the stock at ‘buy’, said this was “another strong performance” by Reckitt, noting that LFL sales growth was more than 100 basis points ahead of its forecast.

“RB continues to offer superior short- and medium-term earnings prospects and visibility relative to peers,” said the bank, adding that the stock’s premium to the sector is warranted.

At 0926 BST, Reckitt shares were up 2.2% at 6,281p.