UK consumer-goods giant Reckitt Benckiser (LSE: RKT) released its first-quarter results yesterday morning. Unfortunately, despite sales growth continuing into 2021, the Reckitt Benckiser share price slid again.
Down goes the Reckitt Benckiser share price
On Tuesday, the Reckitt Benckiser share price closed at 6,586p (almost £66). However, following the results announcement on Wednesday, the stock headed south right from the off. After falling early morning, the shares continued to decline all day. At its low yesterday, the share price dipped to a low of 6,315p, before inching up to close at 6,328p. That marked a fall of 258p, down 3.9%.
What caused the Reckitt Benckiser share price to fall on Wednesday? After all, Reckitt beat sales forecasts, thanks to booming sales of hygiene products used to fight Covid-19. Like-for-like revenues were up 4.1%, ahead of predictions. However, this was well below the 13.3% growth recorded a year ago as Covid-19 infections exploded last spring. Somewhat predictably, sales of Lysol disinfectant and the like surged, with sales of hygiene products soaring by 28.5%.
However, Reckitt took a hit as its health (sales -13%) and nutrition (-7.4%) divisions failed to live up to expectations. With most of the world masked up and in lockdown, cold and flu infections plummeted. This caused a drop of nine-tenths (90%) in sales of medicines such as Mucinex, Nurofen, and Strepsils. Nevertheless, total net revenue topped £3.5bn, while ecommerce sales rose by almost a quarter (24%) to more than an eighth (13%) of total revenues. So why the weak share price?
Reckitt ditches its RB brand
In 2009, Reckitt Benckiser launched a major rebrand as RB, introducing a new logo and dropping its historic monikers. Twelve years later, it has admitted defeat and, last month, it decided to be known as…Reckitt. With another new logo and market ticker (RKT). For a company with origins dating back 207 years to 1814, this branding blather is a waste of management time and effort. Meanwhile, the Slough-based business is aiming to expand through four growth drivers: increased penetration, market share gains, new places, and new spaces. Perhaps this expansion of its customers, product ranges, and markets will help boost the Reckitt Benckiser share price in future?
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Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.