ii view: weak cold and flu season dumps Haleon to six-month low

First-quarter trading update to 31 March  

• Organic sales up 2.2% (volumes down 0.2% - product prices up 2.4%)

Guidance:

• Continues to expect organic revenue growth of between 3% and 5% in 2026
• Continues to expect high single-digit adjusted operating profit growth for full year 2026

ii round-up:

Haleon (LSE:HLN) today detailed early-year sales that missed City forecasts, hindered by a soft cold and flu season and weak demand for products including Theraflu and nasal airway clearer Otrivin. 

Adjusted, or organic sales for the first quarter to late March rose 2.2% year-over-year, with a 0.2% dip in volumes countered by a 2.4% increase in pricing. Analysts had expected a 0.4% increase in volumes and 1.9% rise in prices to generate organic sales growth of 2.3%. 

Shares in the FTSE 100 company fell 4% in UK trading to their lowest in six months, having come into this latest news down by around 5% so far in 2026. Rival and maker of flu product Mucinex Reckitt Benckiser Group (LSE:RKT) has fallen by around a fifth in 2026. The FTSE 100 index is up almost 3% year-to-date.  

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Haleon's product portfolio spans the six categories of Oral Health, Pain Relief, Respiratory Health, Digestive Health, Vitamins, Minerals and Supplements (VMS), as well as Skincare and Other.

The group’s many brands include Sensodyne toothpaste, Panadol pain killers and Centrum vitamins. Respiratory sales including flu and cold items was 3.4% lower than a year ago. Oral healthcare items rose the most, gaining 8.3%. 

Geographically, Asia Pacific sales climbed 4% but still missed forecasts, a 1% increase in North America sales exceeded estimates, while a 2.1% rise for the combined Europe, Middle East, Africa and Latin America regions was in line with forecasts. 

Despite a weaker than expected start to 2026, Haleon maintained full-year hopes, forecasting organic sales growth of up to 5% and a high single-digit increase in adjusted operating profit. 

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares, flagging Haleon as a ‘top pick.’ First-half results are scheduled for 30 July. 

ii view:

Headquartered in Weybridge, Haleon was previously part of GSK. Employing around 24,000 people, it operates in more than 170 markets. Sales of Oral Health products generated most sales in 2025 at 31%. That was followed by Pain Relief at 23%, Respiratory Health 17%, Vitamins Minerals and Supplements 15%, Digestive Health 9%, and Skin and other areas the balance of 5%. 

Geographically, the combined Europe, Middle East, Africa and Latin America accounted for most sales in 2025 at 42%, followed by North America at 35% and Asia Pacific the balance of 23%. 

For investors, variations in the cold and flu season can impact customer demand. Own-brand and cheaper products sold by retailers such as supermarkets persists. A prospective dividend yield of 2.2% compares to yields of near 3% or more at Procter & Gamble Co (NYSE:PG) and Reckitt Benckiser, while currency moves can also hurt performance. 

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To the upside, further cost savings of up to £200 million are being targeted in 2026. A diversity of product categories and geographical regions allows positives in one area to counter challenges in another. Net debt fell at the time of its 2025 results, while shareholder returns have included both dividends and share buybacks. 

Haleon has hardly set the market alight since the demerger from GSK in 2022. However, and despite ongoing risks, the sale of health-related products adds defensive qualities and generate strong cashflows, while the shares have also fallen sharply since the Iran war began. It's why investors might still like to consider Haleon for a place in a diversified portfolio.  

Positives: 

• Diversity of product and geographical region
• Targeting cost savings

Negatives:

• Own brand competition from the supermarkets
• Exposure to currency movements

The average rating of stock market analysts:

Buy