Haleon NYSE: HLN reported 2.2% organic revenue growth in its first-quarter trading update, as management pointed to continued pressure on consumer confidence and a weaker-than-usual cold and flu season. The company reiterated its full-year outlook, while highlighting ongoing productivity-driven margin improvement and plans to increase investment in certain growth initiatives.
Q1 growth held back by weak cold and flu season
Chief Executive Officer Brian McNamara said Haleon “navigated a challenging market” in the quarter, with consumer confidence continuing to weaken. He noted that the “continued weakness in cold and flu” reduced group organic growth by 130 basis points.
Chief Financial Officer Dawn Allen said the quarter’s 2.2% organic revenue growth reflected 2.4% from price and a 0.2% decline in volume/mix. Allen added that category penetration remained “resilient,” but consumers are becoming “more value-orientated and seeking more convenience.”
Oral health led the portfolio; VMS improved
Haleon’s oral health business was again a key driver, delivering 8.3% organic revenue growth, which Allen said was “2x ahead of the market.” She attributed U.S. performance to innovation rollouts including Sensodyne Clinical Repair and parodontax Gum Strengthen & Protect, saying this contributed to “double-digit consumption growth.” In India, she highlighted the INR 20 Sensodyne pack, noting that 70% of units were purchased by new consumers to the brand.
In vitamins, minerals and supplements (VMS), Haleon posted 1.7% organic revenue growth, with improvement “largely driven by Centrum,” according to Allen. She said Centrum grew mid-single digit in North America, supported by the launch of Centrum Nutrient Replenish targeted at GLP-1 users, plus continued strength in Centrum Silver aided by “activation of biological aging claims.” In China, she said upgraded daily kits performed well. Caltrate growth, she added, was affected by a tough comparison.
Over-the-counter (OTC) performance was mixed, with Allen citing strength in Panadol, Benefiber, and Tums offset by the weak cold and flu season and declines in Smoker’s Health and Nexium. Respiratory declined 3.4% organically, as approximately 60% of Haleon’s respiratory portfolio is positioned against the cold and flu category, which fell across several markets in the quarter.
Regional results: North America returned to growth; China e-commerce expanded
Allen said North America returned to growth with 1% organic revenue growth, driven by 3.7% price and a 2.7% decline in volume/mix. She attributed the volume decline largely to cough, cold and flu. McNamara said the company has been strengthening marketing effectiveness and in-market execution, including reorganizing around a category-led approach and building a cross-category platform team. He cited GLP-1 as an example that spans “VMS, digestive health, pain relief, and oral health.”
In Asia Pacific, Haleon delivered 4% organic revenue growth, though Allen said it faced a “higher-than-expected significant impact” from weak cold and flu. In China, she said Haleon grew mid-single digit and continued to outperform, with double-digit growth in e-commerce and e-commerce now accounting for “around 40% of our revenues.” McNamara added that Haleon’s Douyin business in China grew 100% in Q1, while emphasizing Douyin is focused on non-OTC products due to regulatory constraints.
In India, Allen said Haleon grew double digit and that Sensodyne has reached double-digit market share in the country, helped by execution and products such as Sensodyne Pronamel.
For EMEIA and Latin America combined, Haleon delivered 2.1% organic revenue growth, driven by 2.6% price and a 0.5% decline in volume/mix. Allen described Europe as resilient with modest growth despite weaker consumption, while Middle East and Africa delivered high single-digit growth in Q1. Latin America was “slightly up,” though both McNamara and Allen pointed to macro pressure and performance issues in Brazil, alongside higher promotional activity.
Guidance maintained; sequential improvement expected
Management reiterated full-year guidance for 3% to 5% organic revenue growth and high single-digit operating profit growth. McNamara said Q1 was “slightly lower than expected, but not material,” adding that the key change since prior guidance is increased macro uncertainty stemming from conflict in the Middle East. He said the Middle East represents about 5% of Haleon’s overall business and that there was “no impact in Q1,” though management is monitoring conditions closely.
Allen said Haleon expects “sequential improvement in growth as we move through the year,” driven by improved North America momentum, increased investment in China e-commerce—particularly Douyin—and an expected improvement in Latin America from Q2 onward as new programs take effect.
On cold and flu seasonality, management indicated revenue is weighted roughly a third in Q1, around 15% in Q2, with Q3 and Q4 “about 30% each,” described as rough numbers during the Q&A.
Productivity, investments, and risk watchpoints
McNamara said productivity initiatives are driving “strong gross margin improvement,” consistent with the company’s strategy to build more competitive supply chains. He also pointed to a GBP 65 million investment announced in March for a new oral health facility in Shanghai, expected to open in early 2028.
On input costs and conflict-related impacts, Allen said Haleon’s cost base exposure to crude is about 3% of revenue, while total commodity exposure, including gums and vitamins, is around 10%. She said the company has fixed price contracts and hedging “in most areas until the end of the year,” but noted Haleon has begun seeing small freight surcharges in Q1 that she expects to increase in Q2 and the second half.
Management also addressed struggling brands. In response to questions about Smoker’s Health, McNamara said the category is down mid- to high-single digits and that Haleon faces share pressure from private label. He said Haleon is increasing promotions to close price gaps and investing more in advertising and promotion, while citing “green shoots” including growth at Walmart and Amazon on the gum variant. He added the company is open to portfolio adjustments, saying Haleon is “actively looking at opportunities” to strengthen the portfolio through higher-growth assets and potential divestments of less strategic assets.
About Haleon NYSE: HLN
Haleon plc NYSE: HLN is a global consumer healthcare company formed through the separation of a large pharmaceutical group's consumer health business in 2022. Headquartered in the United Kingdom, Haleon develops, manufactures and markets a broad portfolio of over‑the‑counter medicines, oral health products, vitamins, minerals and supplements, and other consumer health goods designed for daily self‑care and symptom relief.
The company’s product mix spans categories such as oral care (toothpastes and sensitivity treatments), pain relief and analgesics, respiratory remedies, digestive health products, topical treatments and nutritional supplements.
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