Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) is facing multiple challenges ahead of its third-quarter results, with Jefferies forecasting a 1% drop in like-for-like sales.
Key reasons for the limp forecast include weaker scanner data from the US and the impact of a tornado on the company’s nutrition segment, which is expected to be heavily weighted in the third quarter.
Jefferies analysts point to significant issues affecting sales, including a more pronounced decline in the US nutrition segment, continued weakness in household cleaning products and decelerating sales in the respiratory category.
US scanner data for September showed a 4.5% drop in sales, compared to a 1% decline in July and August, driven by a combination of price reductions and declining market share in key segments.
Jefferies remains concerned about Reckitt's competitiveness, stating: "For now, lack of competitiveness and spending to extend reach still weigh on sales.”
Additionally, litigation surrounding NEC (Necrotizing Enterocolitis) trials continues to pose risks for Reckitt.
The upcoming Whitfield trial, expected to last longer than previous cases due to the involvement of multiple defendants, could add to the company’s uncertainties.
Investors will also be looking for a clearer roadmap of Reckitt’s reported plans to sell its £6 billion homecare division.