Baby formula sales at Reckitt Benckiser are set to be hit by “significant damage” to a warehouse which was struck by a tornado, the consumer hygiene company has said.
A tornado “struck” a third-party warehouse in Mount Vernon, Indiana, in the United States, on Tuesday, July 9, which is now “currently not operational”, the FTSE 100 giant confirmed.
The premises are an “important site” for Reckitt Benckiser’s Mead Johnson Nutrition business which produces the Enfamil baby formula brand, and contains both raw materials and finished products.
Sales “will likely be impacted in the short term”, the company, which is behind products including Strepsil lozenges and Cillit Bang, Dettol and Vanish cleaners, said in a statement.
“We confirm that all employees are safe and express our deepest sympathy for those in the community who have been affected by the tornado,” they added.
Reckitt first gained “partial access to the facility” on Saturday, July 13, and has “diverted all inbound deliveries to our other warehousing facilities” in the United States.
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The business, which acquired Mead Johnson in 2017, says it expects its “comprehensive property damage and business interruption insurance” to “largely offset” the earnings impact.
“We are working closely with all our stakeholders including customers and suppliers, to minimise disruption, by leveraging our global supply chain and managing inventory,” they said.
A further update is expected at Reckitt’s half-yearly results on July 24.
It comes after reports in April that growth was hit at the nutrition arm, weighing down earnings in the first quarter.
Like-for-like revenue growth was reported at 1.5 per cent across the maker of Durex and Nurofen group in the three months to the end of March.
While investors have been watching returns closely amid ongoing concerns about the impact of lawsuits on the Enfamil baby formula business.