Reckitt shares sink as it takes a hit from Iran war and changes to Russian sanctions
Shares in Reckitt tumbled this morning after it missed quarterly revenue expectations amid disruption caused by the Iran war and changes to EU sanctions on Russia.The Dettol maker also warned of lower margins in the first half of the year, amid higher oil prices and lower demand for its cold and flu products.Shares sank as much as 5.6 per cent, their lowest level since October 2024, before recovering to trade down 4.96 per cent at 4,674p.The consumer goods giant reported 1.3 per cent growth in like-for-like net revenue for its core business in the three months to March, below expectations.It said it had experienced a 'double-digit' decline in its emerging-market household care business, due to changes to Russian sanctions that ban exports of germ protection and cleaning products.It confirmed it was still in the process of transferring ownership of its Russian business, which began in April 2022.Reckitt also said it had been hit by higher supply costs caused by the conflict in the Middle East. In a scenario where oil remains at $110 a barrel for the rest of 2026, Reckitt estimates a £130-150million hit to its input cost base. Supply disruption: Consumer goods giant Reckitt missed quarterly revenue expectationsIt said it expected to offset the cost through supply chain efficiencies, hedging and price rises, but anticipates 'an impact on consumer demand as a result of pressure on household budgets'.It said operations and supply in its Middle East business were disrupted, resulting in no like-for-like net revenue growth in the first quarter.In the first half, group adjusted operating profit margin is expected to be around 200 basis points below the 24.6 per cent Reckitt reported for the same period last year.However, the company maintained its forecasts for the full year, assuming no further impact from the war beyond the first half.Elsewhere, Reckitt's germ protection brands such as Dettol and Lysol delivered growth of 9.5 per cent.Adam Vettese, market analyst for eToro, said: 'The long-term investment case remains constructive, a focused portfolio of Powerbrands, rising EM weighting and pricing discipline. 'However, near term sentiment will stay fragile until Q2 proves the expected acceleration although some investors may be tempted by the discount already on offer.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
Share or comment on this article:
Reckitt shares sink as it takes a hit from Iran war and changes to Russian sanctions
