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Investing.com -- Shares of Reckitt Benckiser Group Plc (LON:RKT) fell over 4% on Wednesday after the company reported a mixed set of Q1 2025 results.
While strong growth in Emerging Markets and Intimate Wellness supported Core Reckitt, underperformance in North America and Essential Home, along with concerns around the timing and valuation of planned divestments, weighed on investor sentiment.
Reckitt posted like-for-like Group net revenue growth of 1.1%, with Core Reckitt up 3.1%, driven by strong performances in its strategic growth engines.
Emerging Markets rose 10.7% LFL, led by 6.8% volume growth, while Intimate Wellness grew 16.6%, supported by double-digit volume gains and new product rollouts in China and Europe.
Barclays (LON:BARC) analysts noted that both segments materially outperformed their expectations of 6% growth, and estimated gross margins in Intimate Wellness to be above 80%.
The strength in these areas led them to slightly raise their FY25 organic sales growth forecasts for the Group and Core Reckitt.
However, these positives were overshadowed by a weaker-than-expected showing in developed markets.
North America declined 0.9% LFL amid retailer destocking and slowing consumer confidence. Essential Home, which the company plans to divest, saw a 7% drop in LFL revenue, well below forecasts.
Barclays flagged this as a key risk, especially as press reports suggest the unit’s potential sale valuation has dropped to £3–4 billion from earlier estimates of £6 billion.
The company maintained its full-year guidance of 2% to 4% LFL growth at Group level, and 3% to 4% in Core Reckitt.
Its £1 billion share buyback programme remains in progress, with £815 million completed to date.
Barclays trimmed its price target from £55.50 to £53, citing valuation pressure around disposals and a more cautious view on portfolio pruning, as financing conditions tighten for potential buyers.