Haleon Shares Fall Amid Concerns Over Sales Growth Despite Profit Beat
Despite reporting better-than-expected first-half adjusted operating profit of £1.36 billion, Haleon's shares fell due to concerns over sluggish sales growth in Europe and a sharp decline in respiratory product sales. The company reported organic revenue growth of 2.6% for the period but needs stronger performance in the second half to meet its medium-term target of 4-6%. North American revenue grew by 3.1%, driven by improved distribution, while European demand remained flat. Haleon's CEO expressed confidence that a recovery in cough-and-cold products and growth from emerging markets would drive better results in the second half. However, analysts remain skeptical about whether this will be sufficient to meet expectations. The company also faces rising freight costs due to geopolitical tensions involving Iran and declining consumer sentiment in some regions like Dubai. Despite cost control efforts, Haleon anticipates higher expenses as fixed-price contracts expire later in the year. Management believes it can absorb these increases without raising prices.
Tickers: $HLN