Haleon (HLN) Q3 2026 earnings review
Haleon's toothpaste sales keep rising, but it cuts its outlook
Haleon, the maker of Sensodyne toothpaste and Centrum vitamins, keeps selling more toothpaste but its other categories barely grew. Sales from businesses it owned a year ago rose more slowly than last quarter, below what chief executive Brian McNamara said he had expected. The company cut its full-year target to about 2.5% from 3–5%, which by our math leaves about 2.2% growth for the fourth quarter.
| Sales growth from businesses owned a year ago | 2.6% 3.1% last quarter; 3.4% a year ago |
|---|---|
| Revenue | £2,868M +2.5% from a year ago |
| Oral Health sales growth, like-for-like | 8.8% 6.2% last quarter |
| Full-year sales growth outlook | Cut to about 2.5% 3–5% three months ago |
⚖️ Verdict: 🔴 Bearish
The story got worse because the plan set in July assumed a stronger second half, and by our math that half is now on course to grow more slowly than the first. The three named causes are specific: weak cold and flu demand, a halted Centrum import into China and a route-to-market change in Brazil. But volume growth also slowed outside them, and Europe sold less by volume. The good news: Oral Health rose almost 9% and McNamara kept the target for high-single-digit profit growth, so the cut hits sales, not profit.
The question now is whether the slowdown comes from a weak cold and flu season or from Haleon's own execution. If cold and flu demand recovers in the fourth quarter and the Chinese import stop proves temporary, growth returns toward 3% on its own. If European volumes and American pain relief keep shrinking even with a strong season, the problem is Haleon's. The fourth-quarter figures on 25 February will tell.
🐂 Bull Case
Oral Health Grows Almost 9% on Sensodyne
Oral Health, the toothpaste and denture-care business built around Sensodyne, is Haleon's largest category and its fastest-growing one. Chief executive Brian McNamara said the Clinical platform, a range of Sensodyne toothpastes that includes the new Clinical Repair, "would rank as the fourth-largest toothpaste in the US" on its own.
Sales from businesses owned a year ago rose 8.8% in the quarter, after a weaker second quarter. That is about three times the market's pace, finance chief Dawn Allen said. Sensodyne grew double digits, and in India its sales rose four times as fast as the category, helped by a low-price pack that now accounts for 40% of tubes sold.
This matters because Oral Health provided about nine-tenths of the group's revenue increase by our math, so the rest of Haleon barely grew. The standing caution is that growth had slowed to 6.2% last quarter, and a weak rival's share losses may have helped more than the category did.
What to watch: Oral Health growth in the fourth quarter, reported in February. Another quarter near 9% would mean the June slowdown was noise and the category can carry the group while cold and flu demand recovers.
North America Keeps Growing After Last Year's Reset
North America, a third of Haleon's revenue, shrank a year ago as retailers cut stock and the cold and flu season disappointed. McNamara calls the region's plan a turnaround, and the company said new launches, stronger retail execution and in-store activations "are beginning to deliver improved performance".
Sales from businesses owned a year ago rose 2.5%, mostly from price, against a 0.4% rise in the same quarter last year. Centrum, the multivitamin, grew mid-single digits, and US shoppers bought double digits more of it over the past twelve weeks, McNamara said. Online sales, a fifth of US revenue, also rose double digits.
The caution is that finance chief Dawn Allen still described a sequential slowdown, because cold and flu products fell mid-single digits, so the improvement rests on toothpaste and vitamins while the pain and respiratory shelves stay soft.
What to watch: North America's fourth-quarter growth, when the cold and flu season decides the year. A quarter above 3% would mean the reset holds even where demand is weakest.
Haleon Adds a Second £500 Million Buyback
Haleon bought back £500 million of shares in the first eight months of the year, and finance chief Dawn Allen now adds another £500 million to finish by February. She said the company is "for the first time since separation" at its target of net debt around 2.5 times underlying earnings. At the split from GSK the ratio stood near four.
Total returns to shareholders this year reach £1.6 billion, and Allen cut 19 days from working capital over two years. Roughly a fifth of the new shares will sit in treasury to cover employee share plans, so Haleon cancels fewer shares than the headline suggests.
This matters because buybacks lift profit per share while sales grow slowly, but net debt rose £250 million in the first half and a $2 billion bond falls due in March 2027, so borrowing costs could eat part of the gain.
What to watch: net debt at year-end, reported in February. A ratio above 2.5 would mean the buyback ran ahead of cash generation.
Positives this quarter didn't test
A third-quarter statement reports sales only, so three standing positives got no profit or margin reading. McNamara said productivity programmes are "delivering ahead of our expectations", which is why the profit plan survived the sales cut, but the numbers arrive in February.
- Supply-chain savings and gross margin: not reported; the full-year gross margin bridge in February will show whether the first half's gains held through higher Middle East costs.
- AI tools in selling: a 'Perfect Store' sales method went live in the UK and is planned for 20 markets by March; pricing tools reach 16 of the top 20 markets; any effect shows first in volume.
- Volume-led growth: the one positive the quarter did test went the wrong way, with volume and mix adding 0.5% against 1.4% in the second quarter.
🐻 Bear Case
Haleon Cuts Its Growth Target to 2.5%
Three months ago Haleon planned 3–5% growth in sales from businesses it owned a year ago, which needed a much stronger second half. Now McNamara expects about 2.5% for the year, after a quarter he said was "below our expectations".
By our math the new target leaves the fourth quarter at about 2.2%, barely different from the 2.1% of a year earlier, when retailers were still cutting stock. The second half as a whole is now on course to grow more slowly than the first, by our math.
Haleon names three causes: weak cold and flu orders, a halted Centrum import into China, and a faster route-to-market change in Brazil. The China stop alone cost half a point of growth in the quarter, finance chief Dawn Allen said. But volume growth also slowed to 0.5% from 1.4% in the second quarter, and Europe's volumes shrank, which no single event explains.
This matters because McNamara still presents 4–6% as the medium-term ambition, yet Haleon also lowered its plan last autumn, so the ambition has now missed two years running. He conceded that "we are not satisfied with the broader group growth rate and the consistency of our performance in recent quarters".
What to watch: fourth-quarter growth, reported on 25 February. A figure near 2.2% while cold and flu demand recovers would mean the slowdown sits in Europe and the pain shelf, not in the season.
Cold and Flu Sales Fall for a Sixth Quarter
Respiratory Health, Haleon's cough, cold and flu remedies such as Theraflu and Otrivin, is about 17% of revenue and has shrunk for six straight quarters. McNamara maintains that "Cough, Cold and Flu remains an attractive category for Haleon", citing trusted brands and "significant regulatory barriers to entry".
In the quarter, category purchases in the US dropped 8%, so retailers ordered less for the coming season, and Haleon's Respiratory sales from businesses owned a year ago fell 2.0%. Its own cold and flu revenue declined mid-single digits, behind where McNamara said he expected to be.
Early fourth-quarter signs look better in the US, where McNamara said category purchases over the last four weeks rose mid-teens with Haleon ahead of that. But the US is only "around 30% of our Cough, Cold and Flu business", and the European season has not begun, so the recovery the plan needs remains unproven.
What to watch: Respiratory Health growth for the fourth quarter, in February. A return to growth after two weak seasons would support McNamara's view that the slump is seasonal rather than a lasting loss of demand.
Europe Volumes Shrink Nearly 3%
Europe, 28% of revenue, is Haleon's weakest region. Finance chief Dawn Allen said shoppers are "increasingly seeking value particularly in markets like Germany", and market volumes in Germany and Central and Eastern Europe fell low single digits.
Haleon raised prices by about 2% but volumes fell 2.7%, so sales from businesses it owned a year ago slipped slightly. Centrum dropped double digits and Pain Relief mid-single digits; only Oral Health and the Fenistil skin range grew.
This matters because a year ago Europe grew 3.8%, and over nine months it has gone from 4.1% growth to almost none. By our math that swing alone takes about one point off group growth, more than the group's whole slowdown. McNamara said the regional reorganisation is "now largely complete", which puts the next quarters on the new team.
What to watch: Europe's volume in the fourth quarter. Volumes that stop falling while prices hold would mean the value-seeking is a pause rather than a move to cheaper brands.
Emerging Markets Slow as China Halts Centrum Imports
Haleon counts on emerging markets, led by India and China, to lift group growth. Their sales from businesses owned a year ago rose 5.1%, down from 6.3% in the second quarter. India again grew high teens; the drag came from China and Latin America.
In China, a classification change on a raw material used in Centrum's OTC-registered multivitamins meant Haleon had to "cease importation until further notice". Those products brought in about £75 million last year, and McNamara expects the loss to run through 2027. The rest of China grew double digits, he said.
Latin America stayed flat against a strong prior year, while the Middle East is recovering: consumption trends in the UAE improved and Middle East and Africa grew high single digits. The standing worry about Middle East input costs got no number this quarter.
What to watch: emerging-market growth in the fourth quarter against the high-single-digit rate McNamara wanted for the second half. Another miss would mean the plan for faster growth rests on India alone.
👓 Other Themes
Brazil Sales Model Change Costs £15–20 Million
Haleon is changing how it sells in Brazil: broader market coverage, more customers, a leaner supply chain and lower inventory. It planned a gradual rollout through 2027 but pulled the change into the fourth quarter "to coincide with the implementation of Brazil’s new tax framework". The move cuts fourth-quarter revenue by about £15–20 million as the channel holds less stock.
💲 Other KPIs
Pain relief sales from businesses owned a year ago barely moved, up 0.5% after 4.6% last quarter. Advil, Panadol and Voltaren each grew low single digits, but Panadol fell in Latin America and the category shrank mid-single digits in Europe. Advil Liquid, newly approved by the FDA, starts shipping toward the end of the fourth quarter.
Digestive remedies grew 2.5% from a year ago, half the pace of the second quarter. Benefiber, the fibre supplement, rose double digits on activity around GLP-1 weight-loss drug users, while Tums stayed flat because of order timing and Nexium fell mid-single digits. ENO reached record share in Brazil after a World Cup campaign.
Asia Pacific sales from businesses owned a year ago rose 3.9%, all of it from volume, as prices slipped slightly. That beats the 3.3% of the first half. Online sales have grown double digits for 15 straight quarters, and Voltaren 2% is now in over 100,000 stores across 75 Chinese cities. Southeast Asia and Taiwan grew low single digits as the Middle East conflict weighed on shoppers.
🔮 Guidance
Cut. The plan now has sales from businesses owned a year ago growing about 2.5% this year, down from the 3–5% range set in July. By our math that leaves the fourth quarter at roughly the pace of a year earlier, about 2.2%, despite an easy comparison. Haleon blames weak cold and flu orders, the Centrum import stop in China and the Brazil route-to-market change. It is the second autumn in a row the company has lowered its growth plan.
Unchanged. Profit excluding one-offs and currency effects should still rise at a high-single-digit rate even though the sales plan fell, because McNamara said productivity savings are "delivering ahead of our expectations". He also called high gross margin "a uniquely strong platform to invest behind our brands and capabilities". Haleon reports no profit in a third-quarter statement, so the first reading is the full-year result in February.
Unchanged. Haleon still expects net interest cost of about £255 million for the year. First-half net finance costs were £119 million, so by our math the second half carries about £136 million, more than the first. The new buyback and a bond due in March 2027 make the cost of borrowing worth watching.
Unchanged. The plan still assumes a tax rate of about 24.5% on profit excluding one-offs. The first-half rate was 25.9%, so by our math the second half needs roughly 23% for the year to land on plan, and nobody explained how. The full-year results will show whether the rate came down.
Lowered. Currency translation should now have a broadly neutral effect on revenue and profit this year, after a slightly positive effect expected in July, because the pound firmed against the dollar: the nine-month average rate was 1.34 against 1.31 a year earlier. In the third quarter the translation effect on revenue was zero.
❓ Key Questions
How is the cold and flu season starting outside the US?
McNamara gave a four-week US reading of mid-teens growth but said the season elsewhere had not begun. Europe and the rest of the world are about 70% of the business, and the new 2.5% plan depends on them.
How much Centrum revenue does China lose in 2027?
The suspended OTC-registered products earned about £75 million in 2025. McNamara expects the impact to run through 2027 and is working on remedies; a figure for next year, and a date for any fix, would size the hole.
Did gross margin keep expanding in the third quarter?
The statement carries no margin figures. Profit growth of high single digits on 2.5% sales growth requires the supply-chain savings to hold through Middle East cost inflation, which the first-half results flagged for the second half.
Why is the tax rate above plan, and what fixes it?
The first-half rate of 25.9% sits above the 24.5% plan the company kept. By our math the second half needs about 23%, and neither executive addressed it.
When does Haleon return to 4–6% growth?
McNamara still cites the medium-term ambition but has now lowered the annual plan two autumns in a row. Investors need the regions and categories that must deliver first, and a year by which the ambition applies.