Reckitt sales hit by tornado damage to warehouse
- Reckitt confirmed that the Mount Vernon site had sustained 'significant damage'
Reckitt has warned short-terms sales of its baby formula powder are likely to be affected after a tornado struck the consumer giant's third-party warehouse in the US.
The group told investors the Indianna-based site, which houses its Mead Johnson formula, had sustained 'significant damage', but confirmed that all employees present were safe.
The Mount Vernon warehouse is currently unoperational after the tornado struck on 9 July.
It is an important site for the Mead Johnson Nutrition business, and contains both raw materials and finished products, Reckitt said.
Impact: Reckitt's short-terms sales of Mead Johnson baby formula powder are likely to be affected after a tornado struck the group's third-party warehouse
Reckitt said it had diverted all inbound deliveries to other warehousing facilities in the US.
Some Nutrition products will likely be affected in the short term, a Reckitt spokesperson added.
The spokesperson said: 'We are partnering with customers and suppliers on expedited recovery efforts to minimise disruption by leveraging our global supply chain and managing inventory at our other US warehouses.'
Reckitt assured investors it has comprehensive property damage and business interruption insurance, which it expects will largely offset the impact on earnings.
This marks the third instance of bad news the company has shared this year.
In February, an investigation showed some employees had under-reported liabilities in the Middle East, with shares posting their biggest one-day drop since December 1999.
Just a month later, the stock tumbled again after an Illinois jury ordered Reckitt unit Mead Johnson to pay $60million, or over £46million, to the mother of a premature baby who died of an intestinal disease after allegedly being fed one product made by the company´s Enfamil baby formula brand.
Reckitt has said it would pursue all options to have the verdict overturned in a law, as it stood by the safety of all its products.
Its shares slumped on the news, amid fears Reckitt would face more financial liabilities from lawsuits related to the baby formula.
Reckitt said it would provide a further update on 24 July, when it publishes its half-year results.
Reckitt shares fell 0.21 per cent or 9.00p to 4,269.00p on Wednesday, having fallen over 26 per cent in the last year.
Last month, it was reported that activist investor Eminence Capital had bought more stake in Reckitt, owning at least 0.5 per cent of the consumer goods group's stock after it began buying up shares in March.
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