5 March 2026
Reckitt has delivered a solid set of full year results, with fourth quarter sales slightly ahead of expectations thanks to another very strong performance in emerging markets. Profits and earnings for the year were broadly in line with forecasts, and guidance for 2026 points to another steady year despite an expectedly soft first quarter.
Fourth quarter sales rose 5.4%, driven by pricing, with only a marginal decline in volumes. Emerging markets again stood out with growth of 17%, supported by China, Mexico and India. North America delivered modest progress despite a weak cold and flu season, while Europe remained a drag with sales down 4.5% due to subdued categories and tougher competition.
Operating profit for the year was up 5%, broadly matching expectations. Margins improved to 24.9% even as Reckitt increased its advertising and promotional spend by more than 1 percentage point, which shows management still has firm control of costs. The proposed full year dividend is up 5% and follows February’s special dividend from the sale of the Essential Home brands. The next phase of the share buyback is expected to begin shortly.
Guidance for 2026 targets organic sales growth of 4 to 5%, consistent with medium‑term ambitions, though weaker cold and flu markets and continued difficulty in Europe mean the first quarter will be challenging. Currency headwinds are likely to leave earnings broadly flat, which explains some of the initial weakness in the share price and the risk of modest downgrades.
After recovering from its litigation‑driven derating, the shares trade on around 16 times expected earnings, a small discount to history and peers. The ongoing legal uncertainty justifies some of that discount and keeps the risk profile elevated, although valuations at businesses such as Haleon show the potential upside for a more focused consumer health portfolio.
