Reckitt Cuts Revenue Growth Forecast to 3.5%-4.5% After North America Decline
Key Facts
On 27 October, Reckitt cut its 2026 like-for-like net revenue growth forecast for Core Reckitt to a range of 3.5% to 4.5%, after saying in July it expected growth of 4% to 5%. The revision came with its third-quarter results, in which the unit posted growth of 3.3% on the same basis, or 3.9% excluding the Russian hygiene business. In North America, like-for-like revenue fell 1.3% to £649 million during the quarter, although it remained up 0.1% year to date. The company attributed the region's weakness in part to temporary manufacturing capacity constraints that limited its ability to meet strong demand for Lysol. It also said the timing of retailer partner orders weighed on performance late in the quarter, and that it expects this effect to reverse in the fourth quarter.
The new guidance marks a reduction from the range Reckitt announced in its half-year results, when it maintained its 2026 Core Reckitt growth forecast at 4% to 5%. The unit had posted like-for-like growth of 2.7% in the first half, accelerating to 4.2% in the second quarter. In its third-quarter results, the company said growth was 3.3%, rising to 3.9% excluding the Russian hygiene business. Chief Executive Chris Licht said the revised outlook reflected Lysol disruption and a slowdown in the vitamins, minerals and supplements category in China during the third quarter. He added that demand for seasonal cold and flu remedy brands was positive at the start of the fourth quarter.
In North America, Reckitt said temporary manufacturing capacity issues limited its ability to meet strong demand for Lysol as the company worked to upgrade its manufacturing capabilities. The region's like-for-like revenue fell 1.3% in the third quarter to £649 million, after returning to growth in the second quarter at 2.8%, and posting growth of 0.8% in the first half. The company also reported that the timing of retailer partner orders affected results late in the quarter, but expects this effect to reverse in the fourth quarter. It said: "We are addressing Lysol manufacturing challenges and expect Lysol and North America to recover in the fourth quarter." In September, Reckitt announced a multi-year investment of up to $600 million in North America, including upgrades to operations and measures to address constraints that affected Lysol supply.
Performance across other markets was mixed in the third quarter, with Europe returning to like-for-like growth, up 0.8%, taking revenue to £867 million. Emerging markets posted like-for-like growth of 8.0%, rising to 9.8% excluding the Russian hygiene business. In July, the company had said its non-core Mead Johnson Nutrition business was expected to deliver low single-digit like-for-like revenue growth in 2026. It also maintained its forecast for the combined adjusted operating margin of Core Reckitt and Mead Johnson Nutrition within a range of 24.9% to 25.6% for the year. The company did not provide a new margin adjustment in the information it released as part of its third-quarter update.
Reckitt will host an investor event titled "Focus on North America" at its regional headquarters in New Jersey on 19 November. The event follows the announcement of the multi-year investment of up to $600 million and comes as the company expects Lysol and the region to recover in the fourth quarter. It also follows a quarter in which North America recorded a decline in like-for-like revenue, despite the strong demand for Lysol cited by the company. Reckitt expects the effect of the timing of retailer partner orders to reverse in the fourth quarter, alongside efforts to address manufacturing constraints. The region had posted growth in the second quarter, providing a direct comparison with the decline recorded in the third quarter.