Haleon Shares Tumble on Weak Demand for Cold and Flu Medicines
The consumer healthcare firm, owner of Panadol and Sensodyne, saw its stock drop significantly amid a downgrade in sales growth expectations.
Shares in consumer healthcare firm Haleon experienced a significant decline, falling 15 percent as demand for cold and flu medicines weakened. The company, known for brands like Panadol and Sensodyne, saw its stock price suffer its largest one-day slump since its spin-off from GSK in 2022.
Haleon reported that revenues increased by 2.5 percent to £2.87 billion in the third quarter ending September 30. However, the company is now forecasting full-year organic revenue growth of approximately 2.5 percent, a reduction from its earlier projection of 3 percent to 5 percent.
The company attributed some of the revenue slowdown to 'soft' demand for cold and flu remedies, which led to lower orders in North America, despite the region still achieving 1.5 percent revenue growth. Sales in Europe declined by 0.9 percent to £798 million, a result Haleon linked to challenging trading conditions.
In a memo to staff, CEO Brian McNamara acknowledged the need for improvement, stating that the company must accelerate innovation, enhance commercial execution, and optimize spending on advertising and promotions. He emphasized the importance of ownership, accountability, and a relentless focus on results.
Analysts had anticipated stronger revenue growth, with expectations around 3.2 percent according to a company-compiled poll. The downward revision in forecasts and acknowledgement of weaker demand contributed to the sharp decrease in Haleon's share value.