Shares in Durex condom maker Reckitt Benckiser have flopped over nine per cent in early trades this morning after the firm missed analyst expectations for 2023.
Operating profit at the consumer goods giant came in at £2.5bn down from £3.2bn the prior year.
Reckitt, which also makes Dettol cleaning products and Nurofen painkillers, said full-year net revenue was £55m lower than previously expected.
The group blamed an understatement of trade spending in two Middle Eastern markets for this alongside a slowdown in demand for cold and flu products.
Reckitt said quarterly like-for-like net revenue fell 1.2 per cent while analysts in a company-supplied poll had expected 1.6 per cent growth, a note in Reuters said.
Kris Licht, chief executive officer, said: “While our performance in Q4 was unsatisfactory, we look to 2024 and beyond with confidence.
“We target another year of mid-single-digit growth in health and hygiene, driven by a more balanced contribution from price, mix and volume.”
The group said it is confident in the year ahead and expected like-for-like net revenue growth of two per cent to four per cent, with mid-single-digit growth for our health and hygiene portfolios.
Mark Crouch, an analyst at investment platform eToro, said: “The cost-of-living crisis has forced consumers to make cutbacks, and Reckitt, like their peers, have seen customers trading down to store brand alternatives.
“So while demand has softened, Reckitt remains determined to keep popular brand names such as Strepsils, Nurofen, Durex and Dettol on solid footing, reiterating this morning that strengthening product superiority is a top priority.”
He added: “The question shareholders might be asking is where does the next spurt of growth come from? Reckitt shares have been trading in a sideways range for almost a decade, so investors will be eager to see what the company has planned to break that trend to the upside.”