Haleon cuts revenue growth forecast to 2.5% after third-quarter slowdown
Key Facts
Haleon cut its forecast for organic revenue growth in 2026 to around 2.5%, saying third-quarter growth came in below its expectations, reflecting pressures that included weaker consumption of cough, cold and flu treatments and a reclassification of raw materials for Centrum products in China. Chief Executive Brian McNamara said organic revenue growth in the third quarter was 2.6%, adding: "Our organic revenue growth in the third quarter was below our expectations." The result was below the analyst consensus published on the company’s website on October 21, which stood at 3.2% based on 10 estimates. It marked a slowdown from organic growth of 2.6% in the first half and growth of 3.1% in the second quarter alone, when North America led a sequential improvement. HLN shares closed at 10 on October 28, compared with a close of 10.08 the previous day; EL7 data does not specify the currency for either price.
The company attributed the weak quarter to two separate factors: lower consumption of cough, cold and flu products, which led to reduced orders in North America, and a reclassification of raw materials linked to Centrum products registered as over-the-counter medicines in China. Haleon said the change halted imports of those products into China until further notice. Revenue from Centrum OTC products registered in China was about £75 million in fiscal 2025, indicating the scale of the business affected by the regulatory measure. The company stressed that the reclassification "was not related to product quality or safety." Weaker seasonal demand therefore coincided with disrupted imports in an important market for these products, rather than the forecast cut being explained by the cold season alone.
Results by category showed a clear divergence between respiratory and oral health. Organic revenue in the respiratory health category fell 2.0% to £499 million in the third quarter, amid weaker consumption and lower orders in North America. By contrast, oral health revenue rose 8.8% to £930 million, supported by innovation. The divergence extended across regions: North America grew 2.5% organically, while Europe contracted 0.6%. Asia-Pacific recorded growth of 3.9%, and international markets grew 6.9%, making them the strongest region cited in the quarterly results.
The company’s adjusted operating profit outlook remained stable despite the revenue forecast cut, with Haleon continuing to expect high-single-digit growth at constant exchange rates. McNamara said management’s priority was to improve volume growth and consistently return to delivering its medium-term guidance. This reflects the company’s distinction between its revenue trajectory, affected by weaker demand and disruption in China, and its outlook for adjusted operating profitability. Haleon also allocated an additional £500 million to share buybacks, with the programme due to be completed by the announcement of fiscal-year results in February 2027. This places the buyback within the capital returns plan announced alongside the cut to its sales growth forecast.
The company expects further pressure on net revenue in the fourth quarter from accelerating the rollout of its new go-to-market model in Brazil, with an estimated impact of about £15 million to £20 million. This operational impact comes alongside weaker consumption in the respiratory category and the reclassification in China, while the company kept its adjusted operating profit growth forecast at high single digits at constant exchange rates. Haleon set February 25, 2027, as the date for announcing its fiscal 2026 results, the next occasion on which it will present its annual results and progress in delivering its guidance. It also said the additional £500 million share buyback programme would be completed by the fiscal-year results in February 2027.