Emerging markets propel Durex maker Reckitt past sales expectations

Adds share price in paragraph 7, analyst comment in 8, finance chief in 12-13

By Pushkala Aripaka and Alexander Marrow

LONDON, Oct 22 (Reuters) - Consumer goods group Reckitt RKT.L beat expectations for third-quarter like-for-like net sales growth on Wednesday, boosted by strength in emerging markets, which marked a bright spot for a sector weighed down by broader pressures.

Reckitt, maker of Durex condoms and Lysol cleaning products, has narrowed its focus to core "powerbrands" and is cutting costs to increase margins as the sector grapples with fragile consumer sentiment and pressure from private-label competitors.

Like-for-like net revenues rose 7% in the three months to September 30, beating analysts' average forecast of 6.4% in a company poll, and including a 15.5% jump for its core brands in emerging markets.

Those markets accounted for about 42% of Reckitt's core net revenues in the quarter and good performance in countries such as China - where Reckitt expects health-engaged consumers to continue delivering strong growth - offset weaker, though improving, results in Europe and North America.

KEEPS FULL-YEAR REVENUE GUIDANCE

While rivals Unilever ULVR.L and P&G PG.N have yet to report results, Nestle NESN.S, the world's largest packaged food company, announced plans earlier this month to cut 16,000 jobs, underscoring challenges the industry faces.

Reckitt, whose shares were trading around 0.1% lower after reaching their highest since June 2023 earlier in the day, maintained its 2025 guidance for like-for-like net revenue growth of above 4% for its core business.

"A guide raise would have been the icing on the cake, but relative to the L'Oreal miss it looks good," said Barclays analysts.

Shares in L'Oreal ORE.PA fell as much as 7% on Wednesday after the French cosmetics maker reported weaker than expected third-quarter sales.

DEVELOPED MARKETS REMAIN CHALLENGING

Like-for-like revenue at Reckitt's core business, home to brands including Strepsils throat lozenges and Dettol handwash, rose 6.7% in the quarter, compared with 5.5% expected in the poll.

Looking ahead to the final quarter of 2025, developed markets will remain challenging, said finance chief Shannon Eisenhardt.

"When we look at the category growth rates, we are seeing Europe roughly flat, we see low-single-digit category growth in North America," Eisenhardt said.

Reckitt also said it continued to expect to complete the sale of its Essential Home business by year-end.

(Reporting by Pushkala Aripaka in Bengaluru and Alexander Marrow in London. Additional reporting by Yadarisa Shabong. Editing by Rashmi Aich and Mark Potter)

((pushkala.a@thomsonreuters.com; X and LinkedIn: @pullthekart;))