Reckitt Faces Pressure Amid Declining Sales in Key Categories
Reckitt Benckiser Group Plc, the multinational behind consumer staples like Lysol, Dettol, and Durex, is grappling with sluggish growth, as recent figures point to softening demand and rising competition across its core categories.
The household and personal care giant delivered less-than-expected performance in several areas, raising questions about its current momentum. Hygiene sales—a key segment that includes brands such as Lysol and Harpic—fell 4.4% year-on-year in Q1, significantly missing analyst expectations. Growth in Reckitt’s health and nutrition portfolios also lagged expectations, with a dip in Enfamil sales intensifying concerns about its U.S. infant formula business.
Mounting Headwinds in Core Markets
While Reckitt enjoyed pandemic-era tailwinds thanks to heightened demand for cleaning products, normalization in usage and increased competition have narrowed its edge. Hygiene products, once a strong growth driver, are now experiencing volume contractions, highlighting a broader consumer shift toward value-oriented purchasing.
Additionally, Reckitt’s U.S. nutrition division has come under renewed scrutiny. A recent ruling ordered the company to pay $60 million in damages tied to its now-acquired Mead Johnson infant formula, which has faced safety-related lawsuits. The legal overhang, along with slowing sales volumes, raises strategic concerns as Reckitt evaluates whether to divest the division entirely.
Margins Under Pressure
Although price hikes have buoyed revenue across segments in the short term, they have not been sufficient to offset volume declines. With input cost inflation easing, consumer goods firms are seeing reduced pricing power—pressuring margins and limiting future pricing levers.
Reckitt’s full-year 2024 guidance projects low single-digit like-for-like net revenue growth and modest margin expansion, assuming mid-single-digit growth in its Health and Hygiene portfolios. But with underperformance in Q1 and lingering uncertainties in its U.S. nutrition business, the company may face mounting challenges in meeting its forecasts.
Outlook for FMCG Stakeholders
For FMCG strategists and brand leaders, Reckitt’s struggles underscore the importance of agile portfolio management and brand innovation—especially in mature markets where consumer demand is recalibrating post-COVID.