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Lysol Maker Confronts Inflation, Slowing Disinfectant Sales Amid Pandemic Recovery

Lysol Maker Confronts Inflation, Slowing Disinfectant Sales Amid Pandemic Recovery

The maker of Lysol has ridden a wave of demand for its cleaning products since Covid-19 hit. Now Reckitt Benckiser Group PLC is grappling with a pandemic-recovery double whammy: slowing sales of disinfectants and rising cost inflation.

Reckitt posted record sales last year, boosted by demand for its products like Dettol soap and wipes that strained its ability to keep stores stocked. But with Covid-19 vaccines being rolled out across the world and restrictions easing, the company says those trends have started to moderate in recent months.

“We are seeing shifts in behavior,” Chief Executive Laxman Narasimhan said of demand for hygiene products. “What we did see in Q2, in the U.S. in particular, was a tail off that was higher than we thought.”

Reckitt on Tuesday reported a 1% fall in overall like-for-like sales and warned it expects third-quarter sales growth to be lower than last year. Shares dropped as much as 9% in London.

As well as slowing growth, the company—like others in the consumer-goods industry—is also contending with rising prices of things like plastics and paper, and higher freight costs. Reckitt said its operating profit margin for the first six months of the year fell 2.9 percentage points to 21.6%.

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