Reckitt warns sales will be hurt by tornado damage at Indiana warehouse
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Reckitt Benckiser Group Plc said sales will be affected by a tornado that struck a warehouse in Mount Vernon, Indiana, where it stores products and raw ingredients for its baby formula business.
The consumer goods company said Wednesday that the third-party warehouse has not been operational since the tornado hit on July 9.
“We confirm that all employees are safe and express our deepest sympathy for those in the community who have been affected by the tornado,” Reckitt said in a statement on its website.
The Mead Johnson nutrition business contains Reckitt’s infant formula brands. Shares in Reckitt are down by more than a fifth since the start of the year after the company was hit by a damaging court verdict in the U.S. relating to one of its formulas, called Enfamil Premature 24, which an Illinois woman blamed for the death of her baby.
It followed a separate setback a month earlier, when Reckitt said a group of its employees in the Middle East had understated the company’s trade spending, meaning net revenue in the region was £55 million ($72 million) lower than previously expected.
The London-listed company’s share price was trading about 0.5% higher on Wednesday afternoon.
Reckitt added Wednesday that it was trying to minimize the tornado’s impact on sales by leaning on its global supply chain, other U.S. warehouses and stock held by retailers. It said it currently expects its insurance cover to largely offset the impact on earnings and pledged to provide further details when it reports half-year results on July 24.