Core Viewpoint - The National Advertising Division (NAD) has found that certain claims made by Reckitt Benckiser regarding its Lysol Air Sanitizer are supported, while others, particularly unqualified "eliminates odor" claims, should be discontinued [1][2][7]. Odor Elimination Claims - P&G challenged various "eliminates odor" claims made by Reckitt for Lysol Air Sanitizer across multiple platforms, including product labels, websites, and social media [3][4]. - NAD determined that the evidence provided by Reckitt did not support the claim that Lysol Air Sanitizer eliminates all odors at a molecular level [5][6]. - NAD recommended discontinuing claims that suggest Lysol Air Sanitizer eliminates all household malodors and the perception of odor at a sensory level [6]. Comparison to Air Fresheners - P&G contested claims comparing Lysol Air Sanitizer to air fresheners, asserting that only Lysol can remove viruses and bacteria from the air [8][9]. - NAD found that the advertising did not convey a broad message of superiority over air fresheners like Febreze, but supported claims regarding odor reduction [9]. Social Media Advertising - P&G challenged TikTok posts by a Lysol influencer, but NAD found the product was used according to label instructions [10]. - NAD determined that certain claims in website videos and commercials implied that Lysol Air Sanitizer eliminates all malodors, which was unsupported [11]. - Reckitt voluntarily discontinued certain TikTok videos that misrepresented product use, which NAD treated as compliance with its recommendations [13]. Advertiser Response - Reckitt expressed disagreement with NAD's conclusions regarding its sensory testing but accepted the findings related to the reviewed advertising [14].

Financial Data and Key Metrics Changes - Core Reckitt achieved 3.1% like-for-like net revenue growth and 0.3% volume growth, with a closer estimate of 1% when excluding the SAP pull-forward impact from the previous year [3][9] - Group like-for-like net revenue growth was reported at 1.1%, driven by the strong performance of Core Reckitt [9] - Emerging Markets saw a significant growth of 10.7%, with volume growth of 6.8% and a price/mix impact of 3.9% [10][21] Business Line Data and Key Metrics Changes - Intimate Wellness and Germ Protection categories experienced double-digit growth, particularly in China and India [10][15] - Seasonal OTC brands in Self Care declined mid-single digits due to higher retailer inventory levels at the start of the period, while VMS portfolio saw strong double-digit growth [15][19] - Essential Home reported a decline of 7% in like-for-like net revenue, attributed to a tough comparative period and SAP implementation impacts [18][21] Market Data and Key Metrics Changes - North America experienced a volume decline of 1.8% and a like-for-like net sales decline of 0.9%, with a positive price/mix of 0.9% [13] - Europe saw a 1.7% like-for-like net revenue decline, with volume down 4.7% and a price/mix increase of 3% [12] - Emerging Markets continued to show strong performance, with expectations of mid- to high-single-digit growth in Q2 and the second half of the year [22] Company Strategy and Development Direction - The company is focused on transforming Reckitt into a more efficient, world-class consumer health and hygiene company, with a sharpened focus on Powerbrands [3][24] - The Fuel for Growth program is expected to drive adjusted operating profit ahead of net revenue growth, with a target of 3% to 4% revenue growth for Core Reckitt for the year [21][23] - The planned exit from Essential Home is progressing, with the management team focused on improving performance and completing the separation process [6][7] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the ability to mitigate tariff impacts through strong gross margins and diversified supply chains [5] - Despite macroeconomic uncertainties, the company maintains its fiscal '25 guidance, expecting group like-for-like net revenue growth of 2% to 4% [21][22] - The management team is optimistic about the performance of Intimate Wellness and Germ Protection, expecting sustained strong volume growth [44][61] Other Important Information - The company has initiated a GBP 1 billion share buyback program, with GBP 815 million already repurchased [20] - The new organizational structure is functioning effectively, with a focus on operational excellence and growth [8] Q&A Session Summary Question: What drove the delta versus expectations in Europe and North America? - Management noted a steeper drop-off in seasonal demand and significant retailer destocking impacting North America, while Europe faced macro volatility affecting consumer behavior [29][30][32] Question: What gives confidence in offsetting Essential Home's negative performance in Q2? - Management highlighted the stability of the Essential Home business and expected sequential improvement in Q2, supported by promotional activities and calendar launches [34][35][61] Question: Are there any one-offs in the strong volume performance of Intimate Wellness and Germ Protection? - Management confirmed that the strong performance was due to genuine underlying demand and market share gains, with no significant one-offs [43][44] Question: What are the sell-out trends in North America and Europe? - Sell-out trends in Europe are mid-single-digit growth, while North America has seen a slowdown to low single digits, primarily due to destocking and seasonal resets [51][52][53] Question: How will the Essential Home sale impact cash returns and buyback plans? - Management clarified that there is no announced delay in the Essential Home sale process, but acknowledged that market conditions could affect the timeline [91] Question: Is destocking becoming apparent outside of OTC and VMS? - Management indicated that the most pronounced impact has been in OTC and VMS, with different retailers making varied decisions based on their market performance [95][96]

Core Viewpoint - Scott+Scott Attorneys at Law LLP is investigating Reckitt Benckiser Group PLC for potentially issuing misleading statements and failing to disclose material information to investors, which may violate federal securities laws [1] Group 1: Legal Issues and Lawsuits - Over 500 state and federal product liability lawsuits have been filed against Reckitt and Abbott Laboratories, alleging inadequate warnings regarding the risks of necrotizing enterocolitis (NEC) for premature infants consuming cow milk-based formulas [2] - A jury in St. Clair County, Illinois, awarded a $60 million verdict against Reckitt in the first NEC lawsuit to go to trial [3] - Following the verdict, Reckitt's American Depositary Receipts (ADRs) fell by $1.87, or nearly 14%, closing at $11.44 per ADR [3] - Another jury in St. Louis, Illinois, awarded $495 million in damages against Abbott in a separate NEC lawsuit, leading to a further decline in Reckitt's ADRs by $1.02, or nearly 9%, closing at $10.64 per ADR [3] Group 2: Company Background - Reckitt is a global consumer goods company based in the United Kingdom [2]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps identify stocks with strong momentum characteristics, with Reckitt Benckiser Group PLC (RBGLY) currently holding a Momentum Style Score of A [2][3] Group 2: Performance Metrics - RBGLY shares have increased by 0.88% over the past week, matching the performance of the Zacks Soap and Cleaning Materials industry [5] - Over the past quarter, RBGLY shares have risen by 11.71%, and by 17.5% over the last year, significantly outperforming the S&P 500, which has moved -4.38% and 9.82% respectively [6] Group 3: Trading Volume and Earnings Outlook - The average 20-day trading volume for RBGLY is 391,230 shares, indicating a bullish sign when combined with rising stock prices [7] - In the past two months, three earnings estimates for RBGLY have increased, raising the consensus estimate from $0.85 to $0.90, with no downward revisions [9] Group 4: Conclusion - Given the strong performance metrics and positive earnings outlook, RBGLY is rated as a 2 (Buy) stock with a Momentum Score of A, making it a promising investment option [11]

Financial Performance - Group net revenue grew 1.4%, in line with guidance of 1% to 3% growth, with Health and Hygiene growing like-for-like net revenue by 4.6% and volume by 2.1% excluding seasonal OTC [7][16] - Adjusted operating profit increased 8.6%, leading to strong EPS growth of 7.9% supported by share buyback and lower tax rate [8][9] - Free cash flow was £2.2 billion, enabling £2.7 billion returned to shareholders, up 75% year-on-year [18][43] Business Line Performance - Hygiene delivered 4.2% like-for-like growth for the year, with strong performance across powerbrands and regions [20][21] - Health achieved 2.1% like-for-like growth, driven by nonseasonal powerbrands and strong growth in China, despite a weak cold and flu season [24][25] - Nutrition saw a decline of 7.3% in like-for-like net revenue due to supply disruption from a tornado, but market share is expected to improve as supply normalizes [29][30] Market Performance - Strong growth in Europe and developing markets, particularly in China where net revenues grew double-digit [8][28] - 55% of top CMUs held or gained market share, up from 47% a year ago, indicating positive market share momentum [21][25] - North American performance was negatively impacted by seasonal OTC, but overall market share gains were noted [8][28] Company Strategy and Industry Competition - The company is focused on a sharpened Core Reckitt business, with intentions to exit Essential Home and Mead Johnson Nutrition by 2025 [10][44] - Investment in innovation and R&D is prioritized, with total CapEx of £500 million to support future growth [6][30] - The Fuel for Growth program aims for a 300 basis point reduction in fixed costs by 2027, enhancing operational efficiency [33][35] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the portfolio but acknowledged uncertainties in the macro environment affecting consumer confidence [94][139] - The guidance for 2025 is set at 3% to 4% like-for-like net revenue growth, reflecting current operating conditions [46][139] - The company expects to continue delivering EPS growth and operating margin expansion, despite potential challenges [106][107] Other Important Information - The company has simplified its organizational structure, moving from five to three layers to enhance accountability and decision-making [6][49] - The innovation pipeline remains strong, with new product launches planned across various categories [56][66] - The company is leveraging digital and generative AI to improve operational efficiency and product development [39][75] Q&A Session Summary Question: What is driving the 4% to 5% midterm guide being lower than previously communicated? - Management indicated that the decision reflects a prudent approach considering the uncertain macro environment and consumer confidence [94][96] Question: What are the expectations for gross margins in 2025? - Management does not expect further expansion of gross margins in 2025, with a focus on reinvesting savings into brand equity investment [97][98] Question: Can you clarify the outlook for operating margin and EPS growth? - Management confirmed expectations for operating margins to grow and reiterated a focus on year-on-year EPS growth [106][107] Question: What is the status of the Biofreeze brand and its future? - Management expressed confidence in Biofreeze, citing a strong innovation pipeline and plans for international expansion despite recent category slowdowns [134][136] Question: Are there any expected dis-synergies from the divestiture of Essential Home? - Management indicated that while there may be some costs associated with preparing for the divestiture, significant savings in core operations are expected to offset these impacts [120][127]

Core Viewpoint - Reckitt Benckiser Group plc (RBGLY; RBGPF) appears to have reached a low in April 2024 and is currently experiencing a rally, outperforming its peer group [1] Group 1 - The company has shown signs of recovery and growth since April 2024 [1] - Reckitt is outperforming its competitors in the market during this period [1]

Core Insights - 2024 has been challenging for shareholders of Reckitt Benckiser, with previous coverage in January rating the stock as a 'Buy' despite existing issues [1] Group 1 - The company is categorized as a British consumer staples giant, indicating its focus on essential goods [1] - The investment approach favored is long-term, buy-and-hold, particularly in stocks that can deliver sustainable high-quality earnings [2]

Financial Data and Key Metrics Changes - The company reported a 0.5% like-for-like net revenue decline for Q3 2024, primarily driven by a 17.4% decline in the Nutrition business due to the Mount Vernon tornado impact [8][11] - The combined Health and Hygiene businesses grew by 2.6% in the quarter, with Hygiene growing by 2.1% and Health by 3.2% [8][10] - Year-to-date volume growth in Hygiene was 0.9%, with Q3 volume growth at 0.7%, led by Lysol [8][9] Business Line Data and Key Metrics Changes - Health delivered a 1.9% like-for-like net revenue growth year-to-date and 3.2% in Q3, driven by Durex, Dettol, VMS, and Gaviscon [10] - The Nutrition segment experienced an 11.6% like-for-like net revenue decline year-to-date and a 17.4% decline in Q3, primarily due to supply constraints from the tornado [11][12] - Hygiene's performance was broad-based, with core Powerbrands like Finish, Vanish, and Harpic contributing to growth, despite a tougher comparison for Finish in Q3 [9][10] Market Data and Key Metrics Changes - The company noted strong market share gains in the Health business, with improvements across OTC brands, Durex, and Dettol [4][10] - The U.S. Nutrition market share is under pressure due to supply constraints, but the company expects recovery in the next 6 to 9 months [33][34] - Developing Markets delivered stable performance with low single-digit growth [12] Company Strategy and Development Direction - The company is focused on portfolio sharpening and organizational simplification, with a new operating model set to be deployed in January 2025 [5] - The share buyback program is progressing, with GBP 321 million worth of shares repurchased since July [5] - The company plans to exit the Essential Home business by the end of 2025, with a seasoned leadership team in place to manage the transition [5][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year net revenue growth targets of 1% to 3%, with expectations for acceleration in Q4 [13] - The company anticipates a strong Q4 driven by underlying brand strength and easier comparatives from the previous year [13][22] - Management remains optimistic about the Health business's competitiveness and market share gains [4][10] Other Important Information - The company is actively managing litigation related to Mead Johnson, with no significant impact on brand equity expected [6][7] - Insurance proceeds related to the Mount Vernon tornado are expected to be recognized within 2024 and will be accounted for in EBIT [58][59] Q&A Session All Questions and Answers Question: Can you dig into market share commentary and gross margins versus BEI spend in the second half? - Management noted improvements in market shares across Health and Hygiene, with Health trending above 60% [16] - Gross margins guidance was not provided, but management does not expect significant differences in the second half [18] Question: How should we think about the bridge from current growth rates to mid-single digits? - Management indicated that the current lower growth rates are not indicative of long-term trends, with expectations for a strong Q4 and recovery in 2025 [22][23] Question: Can you provide details on the Essential Home carve-out and operational risks? - The exit from Essential Home will involve signed agreements, with operational performance being closely managed during the transition [24][26] Question: What are the uncertainties heading into Q4 regarding guidance? - Management reiterated the 1% to 3% guidance range, citing strong momentum and easier comparatives for Q4 [29] Question: Can you elaborate on Nutrition market shares and cold and flu trends? - Management expects to recover market shares in Nutrition over the next 6 to 9 months, with planning for an average cold and flu season [35][36] Question: How are pricing actions impacting Health and Nutrition? - Pricing in Health was primarily price-driven, while Nutrition faced a negative price impact due to supply management [54][55] Question: What is the status of Mead Johnson and potential sale? - Management views Mead Johnson as a strong business but indicated that timing for any sale will depend on the resolution of ongoing litigation [56][57]

Core Insights - The article compares Reckitt Benckiser Group PLC (RBGLY) and Clorox (CLX) to determine which stock offers better value for investors [1] - RBGLY has a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook, while CLX has a Zacks Rank of 2 (Buy) [1][3] Valuation Metrics - RBGLY has a forward P/E ratio of 15.30, significantly lower than CLX's forward P/E of 23.98 [2] - The PEG ratio for RBGLY is 2.44, compared to CLX's PEG ratio of 3.18, suggesting RBGLY may offer better growth relative to its price [2] - RBGLY's P/B ratio is 4.25, while CLX has a much higher P/B ratio of 40.07, indicating RBGLY is more favorably valued in terms of its book value [2] Overall Assessment - Based on the valuation metrics, RBGLY holds a Value grade of B, while CLX has a Value grade of D, reinforcing RBGLY's position as the superior value option [3]

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