Reckitt's Nutrition Sales Drop After Tornado Hits Warehouse
- Reckitt Benckiser experienced a significant revenue drop due to tornado damage to a key warehouse.
- The firm faced a 17.4% decline in its nutrition division's sales, but took measures by relocating warehousing operations.
- The company is undergoing a restructuring process while addressing legal issues related to its baby formula products.
In July 2023, a tornado significantly damaged a warehouse in Mount Vernon, Indiana, impacting the nutrition division of Reckitt Benckiser, particularly its Mead Johnson baby formula powder sales. This natural disaster led to a 17.4% decrease in sales within the division and a total revenue drop of 0.5% in Reckitt's third quarter. The company managed to mitigate some losses by transferring operations to an alternative warehouse in Singapore. CEO Kris Licht indicated that the company is undergoing a restructuring process, which may lead to job changes as they aim to streamline operations by divesting slower-growing divisions while focusing on their core brands. Reckitt is also presently dealing with numerous lawsuits in the US concerning the connection between their baby formula and necrotizing enterocolitis in premature infants, adding a layer of complexity to their efforts and plans.