Consumer goods company Reckitt raked in just over £6.5bn in revenue in the past six months, though it fell short of analysts’ sky-high sales expectations.
The FTSE 100-listed firm was buoyed by its strong second-quarter revenue, which pulled in some £3bn after selling its Chinese infant formula business for around £1.5bn in June.
Shares were down 8.4 per cent to a total share price of 5,701 in its afternoon trading, after diving over nine per cent this morning.
Around 70 per cent of its sales came from its home brands like Finish, Airwick, Harpic and Veet in the six months to 27 July.
The company enjoyed record sales levels last year during the height of the pandemic, as it has buckled down on its cleaning products and cold and flu brands.
The company, which rebranded itself to Reckitt from Reckitt Benckiser earlier this year, saw its hygiene products lift 7.8 per cent as consumers during Covid are still geared towards cleanliness.
However, its health business, which hosts Mucinex cough syrup and Strepsils lozenges, saw its sales drop 5.6 per cent in the second quarter.
“Overall demand in the disinfectant category remains significantly higher than pre-Covid levels and the two-year stacked growth of our hygiene portfolio is up 34.1 per cent, compared to a normal growth rate, pre-Covid, of around four per cent,” CEO Laxman Narasimham said.
The CEO expects the next quarter to be slower as it will be compared with strong results from 2020 and the year prior.
But “As the world gradually opens up and socialisation returns, cold and flu trends indicate a moderate season which should strengthen performance in the fourth quarter,” he added.
A “drop-off” from the “Covid-related frenzy” was inevitable, equity analyst at Hargreaves Lansdown Laura Hoy explained.
“Reckitt’s in the midst of a transition and at the same time, it’s coping with a come-down from pandemic highs.
“But if the group can hold on to most of the customers it snapped up last year while still growing the arms of the business that struggled during Covid, we think it could be in a strong position to deliver long-term growth,” she said.