UK's Reckitt raises revenue outlook after second quarter beats expectations
Shares jumped 10% to their highest level since early 2024 and were headed for their biggest one-day percentage gain since 2000.
Reckitt, the maker of Durex condoms and Lysol cleaning products, is pivoting to focus on its 11 so-called "power brands" under CEO Kris Licht, as the sector grapples with weak demand and intense competition.
The company reported like-for-like quarterly net revenue growth of 1.9%, compared with 1.7% forecast in a company-compiled consensus.
Reckitt also announced a new share buyback programme of 1 billion pounds over the next 12 months.
Growth in North America and Europe fell short of expectations, dragged by a challenging consumer backdrop and the expected shelf reset of its flu relief medicine Mucinex due to reformulation.
But strong sales in China, India and Latin America made up for weakness in those key markets.
Among Reckitt's other well-recognised brands are Strepsils throat lozenges and Harpic bathroom cleaning products.
"We delivered excellent growth in emerging markets and navigated a challenging consumer environment in our developed markets," Licht said in a statement.
Reckitt raised its 2025 like-for-like net revenue growth forecast for its core business to above 4%, from between 3% and 4% expected earlier.
It now expects overall group like-for-like net revenue growth between 3% and 4% for the year, compared with an earlier forecast of 2% to 4% growth.
The company last week sold a majority stake in its Essential Home business to private equity firm Advent for $4.8 billion. It is also looking at strategic options for its Mead Johnson division, which is the subject of a number of baby formula lawsuits in the U.S.
Reckitt posted operating profit of 1.71 billion pounds ($2.32 billion) for the six months ended June 30, beating analysts' average expectations of 1.66 billion pounds.
($1 = 0.7368 pounds)
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