(Reuters) - British consumer goods maker Reckitt Benckiser Plc on Tuesday reported market beating first-half results, as households increasingly worried about health and hygiene stocked up on Lysol sprays, Dettol soap and Mucinex cough syrup.
The COVID-19 pandemic has relieved pressure on a business that has struggled against intense competition in the health and hygiene sectors for several years.
People are increasingly cleaning their homes and washing their hands to protect themselves from coronavirus, a trend which Reckitt Benckiser CEO Laxman Narasimhan expects to continue even when people spend less time indoors.
Sales of Lysol disinfectants rose 70% in North America, while those of Dettol rose 62%, with growth in both developed and emerging markets, largely because of rising awareness of good hygiene practices, the company said.
Customers are also shopping more online, helping Reckitt’s e-commerce sales surge more than 60% in the first half of the year, and now accounting about 12% the group’s net revenue.
Like-for-like sales for the three months ended June 30 rose 10.5%, beating company-provided estimates of 7.8%, but short of the 13.3% record growth in the first three months of the year.
Narasimhan blamed some of the easing of sales on the destocking of cleaning supplies that consumers had built up ahead of lockdowns in March.
Still, the Slough-based company said it expects high single-digit net revenue performance in 2020, exceeding its medium-term target of mid single-digit growth.
“The outbreak of COVID-19 has both challenged our business but also presented an opportunity to expand our plans and capture new growth,” Narasimhan said in a statement.
Reckitt will invest 200 million pounds over the next two years in its baby formula business, boosting marketing for brands that have not benefited from COVID-related demand and hiring more people in research and development roles. The new investment is in addition to the 2 billion pound investment announced in February, the company said.
Reckitt’s shares were down about 1.6% in morning trading. The stock is up a quarter this year.
Reporting by Siddharth Cavale in Bangalore; Editing by Sherry Jacob-Phillips and David Evans