Reckitt's sales volume dip takes shine off like-for-like sales beat

investing.com:

(Reuters) -Reckitt Benckiser's sales volume fell in the second quarter as the Dettol and Lysol cleaning products maker increased its price mix to tame soaring raw material costs, sending its shares down more than 2%.

Reckitt, whose products also include Nurofen painkillers, Durex condoms and Strepsils cough lozenges, is one of many packaged goods companies that have struggled with higher input costs since the start of the COVID-19 pandemic.

Supply chain disruptions and soaring energy costs in the aftermath of the Ukraine-Russia conflict have sent prices of key raw materials like palm oil, pulp and plastic to record highs.

Consumer goods companies have tried to minimise damage to profits and margins largely by passing them on to retailers and shoppers through price rises.

Reckitt said on Wednesday sales volume for the second quarter was down 7.3% and its price mix rose 5.5% on a like-for-like basis to combat higher expenses.

The company's shares were down 2.4% as of 0715 GMT.

Reckitt retained its 2023 target range of 3% to 5% for group LFL net revenue growth. The company also said it expected adjusted operating margins to be slightly above 2022 levels, excluding last year's one-off benefit of about 80 basis points related to an infant formula supply disruption in the U.S.

Reckitt said its second-quarter like-for-like revenue rose 4.1% on a constant-currency basis, ahead of the 3.7% growth analysts had expected in a company-supplied poll.

Rival Unilever (NYSE:UL) on Tuesday also smashed underlying sales growth forecasts after again raising prices to offset higher costs.

Reckitt on Wednesday raised its dividend to 76.6 pence for the first half, from 73 pence in the year-ago period.