Haleon Shares Dip as Revenue Falls Short of Expectations

Haleon (LON: HLN) shares have declined over 3% Wednesday morning following the release of its full-year 2025 results, as revenue figures missed consensus estimates.

While the company reported progress on its “Win as One” strategy, the market reacted negatively to the revenue shortfall.

Revenue for the year came in at £11.03 billion, a 1.8% decrease compared to the previous year, and below the company-compiled consensus expectation of £11.08 billion.

Organic revenue growth, a key metric, was 3.0%, also falling short of the anticipated 3.4%. Adjusted diluted earnings per share (EPS) landed at 18.8p, above the consensus estimate of 18.6p.

Despite the revenue miss, Haleon demonstrated strength in profitability. Adjusted gross profit increased to £7.193 billion, with a corresponding margin of 65.2%, a 220 basis point improvement. Adjusted operating profit grew by 10.5% to £2.526 billion, resulting in a margin expansion of 160 basis points to 22.9%.

The company showcased strong cash flow generation, reporting £1.913 billion in free cash flow. Disciplined capital allocation allowed for £1.1 billion in shareholder returns during the year. The board proposed a final dividend of 4.9p per ordinary share, contributing to a 7.6% increase in the total full-year dividend. Haleon also allocated £500m to share buybacks in 2026.

The revenue miss was attributed to a weak cold and flu season and lower consumer confidence in North America. However, Oral Health continued to outperform with 7.9% organic revenue growth. Geographically, EMEA and LatAm grew by 4.7%, while Asia-Pacific saw growth of 5.2%. North America experienced a slight decline of 0.4%.

Key Drivers:

• Productivity Initiatives: Delivering adjusted gross margin expansion of 220 bps.
• Strategic Investment: A&P and R&D investments increased by 7.5% and 7.7%, respectively.
• Operating Leverage: Adjusted operating margin up 60bps at actual exchange rates.

Brian McNamara, Chief Executive Officer, said: “2025 was an important year for Haleon. We introduced our Win as One strategy and are already making good progress. Our brands again proved their resilience, and we continued to outperform the market, with 60% of the business gaining or maintaining share this year.”

Looking ahead, Haleon anticipates organic revenue growth of 3-5% in 2026 and high-single digit adjusted operating profit growth at constant currency. While the company’s profitability and cash flow remain strong, investors will be focused on seeing a rebound in revenue growth to justify the company’s valuation. The markets will be closely monitoring if the company can successfully navigate the challenging consumer environment.