South Korea slowdown hurts Reckitt sales

Consumer goods maker Reckitt Benckiser Group reported a bigger than expected slowdown in underlying third-quarter sales growth, stung by a loss of business in South Korea and no growth in Europe and North America.
Reckitt Benckiser factory.Reckitt Benckiser factory.
Reckitt Benckiser factory.

The company, whose brands include Durex condoms and Mucinex cold medicine, said global like-for-like sales which strip out currency exchange rate moves, rose 2 per cent in the quarter. This was below the 2.8 per cent average forecast given to the company by analysts and down from growth in the second quarter of 4 per cent.

Overall reported sales in the third quarter rose 17 per cent to £2.6bn, as the fall in the value of the pound since the vote to leave the European Union lifted the value of overseas revenue.

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However, underlying sales in its Europe and North America business, which accounts for 65 per cent of revenue, were flat on a like-for-like basis, due to disappointing sales for its recently launched Scholl “Wet & Dry” electronic foot file and weak economic conditions in Russia.

Sales in developing markets, which account for 31 per cent of revenue, rose 7 per cent.

Reckitt’s Korean business has collapsed due to a boycott by major retailers over its handling of a scandal in which it is thought that 92 people died from causes related to humidifier sterilizer products made by a unit of Reckitt and others.

The Korean issue reduced overall sales by 1.5 per cent.

Reckitt said it expects full-year sales growth of 4 per cent, having previously suggested that sales would to come in at the lower end of a 4 to 5 per cent forecast.