(Bloomberg) -- Reckitt Benckiser Group Plc, the weakened consumer-goods giant, lowered its sales forecast on weak demand for flu medicines in the U.S. and baby formula in China as the challenges for Chief Executive Officer Laxman Narasimhan mount in his first year at the company.

• The company said full-year comparable sales will probably rise 0% to 2%. That replaces an already downgraded forecast calling for growth of 2% to 3%. Operating margins will also decline slightly, Reckitt said.

• Comparable sales rose 1.6% in the third quarter, half the rate analysts expected.

Key Insights

• Weakness in the U.S. and China weighed on Reckitt’s health division, which sells infant formula and flu medicines.
• Reckitt’s most recent sales target, a legacy from Narasimhan’s predecessor Rakesh Kapoor, lasted only one quarter. Reckitt trimmed expectations last time it reported results on July 30.
• Narasimhan is making his mark on the company quickly, as seen by Monday’s announcement that Reckitt will replace its chief financial officer with Jeff Carr. The new CFO comes from Ahold Delhaize NV, where he got a reputation for delivering more than he promised, something analysts say Reckitt should do more often.
• Reckitt Benckiser has been hampered by a slowdown in its infant formula business, which it gained through a $17.8 billion takeover two years ago. Since then, that division’s sales in China have ebbed as birth rates drop and competitors such as Danone chip away at Enfamil’s market share.

Market Action

• The company’s shares have fallen 12% in the past year.

Get More

• See more details.
• Read the statement.

(Updates with health sales in first insight. A previous version of this story was corrected to show Reckitt expects sales growth of 0-2%.)

To contact the reporter on this story: Thomas Buckley in London at tbuckley25@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier, John Lauerman

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