Haleon plc (HLN) Q1 2026 Earnings Call Transcript
Haleon plc, together with its subsidiaries, engages in the research, development, manufacture, and sale of various consumer healthcare products in North America, Europe, the Middle East, Africa, Latin America, and the Asia Pacific. The company offers oral health products, such as toothpastes, mouth washes, and denture care products under the Sensodyne, Polident, Parodontax, Aquafresh, and Biotene brands; and vitamins, minerals, and supplements under Centrum, Emergen-C, Caltrate brands. It also provides various over-the-counter products comprising nasal drops, and cold, flu, and allergy relief products under Otrivine, Theraflu, and Flonase brands for respiratory issues; anti-inflammatory and pain relief products under Voltaren, Panadol, and Advil brands; and antacids and antihistamine products under TUMS, ENO, and Fenistil brands for digestive health and other issues. The company was formerly known as DRVW 2022 plc and changed its name to Haleon plc in February 2022. Haleon plc was founded in 1715 and is headquartered in Weybridge, the United Kingdom.
Haleon guides 2026 at 3%–5% organic growth, underpinned by margin expansion and a restructured, growth-focused operating model, while U.S. and emerging markets drive near-term performance.
⭐ Key Highlights
✔Positive Signals
- Gross margin up 220 basis points due to productivity and efficiency gains
- Oral Health franchise showing strong momentum (Sensodyne, Parodontax) and ROI on increased A&P
- New operating model (CGO + 6 units) enables faster category execution and growth investment
- Significant investments in emerging markets (India double-digit growth; China e-commerce growth)
- U.S. inventory at appropriate levels with expected shelf resets and distribution gains in Q2
✖Negative Signals
- 2025 organic growth of 3% (below prior expectations) for two consecutive years
- 2026 top-line guidance still below medium-term target, indicating persistent market uncertainty
- Digestive Health drag in the U.S. from Nexium amid private-label pressure
- Pain relief underperformance in some regions outside Asia, lack of consistent growth
- Q1 softness from cold/flu season weighing on near-term results and channel dynamics in the U.S.
📊Financial Results
- Gross margin improved by 220 basis points in the year, supported by supply-chain productivity and cost efficiency.
- A&P up 7.5% YoY and R&D up 7.7% YoY, supporting aggressive brand-building and innovation.
- Oral Health momentum contributed to offsetting weaker cold-and-flu performance in the U.S.
- U.S. leadership changes and new sales-organization structure aimed at accelerating distribution gains and profitability.
- Inventory levels in the U.S. aligned with plan; shelf-reset activations expected to drive near-term volumes.
🔮Future Guidance
- 2026 organic sales growth guidance of 3%–5%, with mid-term 4%–6%; Q1 expected to be weaker due to cold/flu dynamics.
- Annual productivity and efficiency program targeted to deliver 50–80bp gross margin uplift in 2026; supports reinvestment in growth (A&P, R&D, capabilities).
- Shelf-space gains and distribution improvements in the U.S. expected to contribute to volume growth in 2026, particularly in Oral Health and related categories.
💡Interesting Insights
- Haleon is explicitly tying growth to a flatter, leaner organization and a broader geographic leadership footprint (LATAM, India, MEA) to unlock growth opportunities, including low-income consumer strategies.
Detailed Analysis
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