Haleon PLC's (LSE:HLN, NYSE:HLN) management could be forgiven for feeling like pharmacists rearranging the medicine cabinet while the queue outside keeps growing.
Barclays, in a detailed preview ahead of the company’s third-quarter results, says the consumer health group’s biggest headache remains its US inventory build-up, a problem Haleon is determined to “clean up” before year-end.
The bank keeps its 'equal weight' rating and 380p target price, forecasting organic sales growth of 3% for the third quarter and 3.3% for the fourth.
That may sound steady enough, but there’s little margin for error. If growth fails to pick up pace, Barclays calculates full-year sales would land closer to 3.2%, shy of the company’s already lowered guidance of “around 3.5%”.
Much hinges on the US, which accounts for more than a third of Haleon’s revenue and where the sell-out data look weak.
Sales through retailers have slowed from 3% growth in the first quarter to a likely 1% decline in the third, as the company deliberately removes two weeks of stock from US drugstore shelves.
The aim is to reset inventory levels for 2026 and avoid another year of mismatched supply and demand. A strong cold and flu season could provide some relief, but that is out of management’s control.
Haleon also plans a round of price increases, about 4% across a quarter of its US range from November, which may test consumer tolerance.
Elsewhere, Asia and emerging markets should provide some balance, though growth there has cooled slightly, while Europe faces tough pricing negotiations as retailers push back against cost inflation.
Barclays says the company’s long-term story remains intact, with defensive growth, cost savings and steady margins, but the near-term challenge is proving that the US business can regain momentum.
Without that, the group will struggle to reclaim the 4-6% growth “algorithm” that once defined its promise. For now, investors may need to be patient while Haleon gets its shelves in order.