Shares of Reckitt Benckiser (LON: RKT) are down more than 5% today after the release of their Q1 2026 results, despite the company maintaining its full-year outlook.
The market’s negative reaction appears to be driven by concerns surrounding potential impacts from sustained high commodity prices on consumer demand and the company’s profitability.
Reckitt reported Core Reckitt like-for-like (LFL) net revenue growth of 1.3% for the first quarter. This growth was significantly impacted by low seasonal incidence of colds and flu, weak category performance in Europe, and geopolitical disruptions. Excluding the seasonal over-the-counter (OTC) category, Core Reckitt’s LFL net revenue growth was 3.1%, primarily fueled by high-single-digit growth in Emerging Markets.
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Net revenue for Core Reckitt reached £2,598 million, reflecting a 1.2% decline on an IFRS basis. Mead Johnson Nutrition, a non-core segment, saw net revenue of £531 million, a decrease of 7.1%. Overall, Group net revenue was £3,247 million, down 11.8%, largely due to foreign exchange headwinds and the prior year’s contribution from the divested Essential Home business.
The company highlighted that Emerging Markets delivered strong growth, with a 7.6% increase in LFL net revenue. However, Europe experienced a 4.2% decline, and North America saw a slight decrease of 0.9%. These regional disparities reflect varying market conditions and challenges.
A key concern raised by Reckitt is the potential impact of sustained high commodity prices. The company estimates that a scenario of oil at $110 a barrel for the remainder of 2026 would result in a £130 million to £150 million gross impact on its input cost base.
While Reckitt believes it can manage this through supply chain flexibility, hedging, pricing, and a strong gross margin profile, it acknowledges that significantly elevated commodity prices could pressure household budgets and negatively affect consumer demand.
Reckitt is maintaining its full-year 2026 LFL net revenue outlook for Core Reckitt of +4% to +5%. The company anticipates benefiting from a reset of the cold and flu season, the launch of new innovations, and continued momentum in its North America non-seasonal portfolio. Actions are also underway to improve execution in Europe, with continued strong performance expected in Emerging Markets.
The company is actively managing its capital allocation, with an ongoing £1 billion share buyback program. As of April 17, 2026, Reckitt had bought back £669 million of shares since the program commenced on July 28, 2025, returning value to shareholders.
Driver Breakdown:
- Emerging Markets Strength: Double-digit growth in China and India continues to be a significant driver.
- Innovation Pipeline: New product launches, such as Mucinex 12hr Cold and Fever, are expected to contribute to growth.
- Cost Management: The “Fuel for Growth” program aims to offset stranded costs associated with the Essential Home divestment.
CEO Kris Licht stated, “Core Reckitt delivered Q1 LFL net revenue growth of 1.3%, impacted by very low seasonal incidence, weak categories in Europe and geopolitical disruption… We maintain our LFL net revenue guidance for 2026,” reaffirming the company’s commitment to its strategic objectives.
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