Lysol Maker Sees Fastest Growth in Decade on Disinfectants
Reckitt Benckiser raised its revenue forecast as the Dettol disinfectant maker benefits from higher standards of hygiene.
(Bloomberg) -- Reckitt Benckiser Group Plc forecast the fastest revenue growth in at least a decade as the Lysol disinfectant maker benefits from higher standards of hygiene amid the pandemic.
Sales should increase at a low double-digit rate this year on a like-for-like basis, the company said Tuesday. The previous outlook was for high-single digit growth. The stock rose as much as 2.9%.
The pandemic is creating new consumer habits that on the whole are benefiting Reckitt. The company is seeing 86% of consumers adopting better hygiene practices and is much better placed to handle another surge in demand for disinfectants after investments in production capacity, Chief Executive Officer Laxman Narasimhan said on a call with reporters. The U.K. company has set up a business to meet demand from corporate clients including Hilton, Avis and Delta.
Sales of hygiene products rose 20% in the third quarter as the company introduces its cleansers in 19 new markets this year. Sales of Finish dishwasher detergent and Air Wick scented air fresheners have benefited from consumers staying at home.
However, the company said there’s some signs that birth rates are declining, which could dent its infant formula business next year. Also, Durex condom sales have suffered as social distancing reduces opportunities for dating. Still, they’re improving now in markets that have ended lockdowns.
The maker of Strepsils also continues to expect weak demand for over-the-counter flu and cold medicines as the measures consumers take to avoid Covid-19 also reduce the spread of other viral illnesses.
Comparable sales rose 13% in the third quarter. Analysts expected 8.6% growth.
©2020 Bloomberg L.P.