Haleon's Q2 2025 Earnings Call: Unraveling Contradictions in North America Sales and Market Performance

North America sales performance, share performance in the U.S., share gain and loss, innovation and productivity strategy, and North America market performance are the key contradictions discussed in Haleon's latest 2025Q2 earnings call.



North America Performance Challenges:
- Haleon's North America segment experienced a significant decline in organic sales growth, with a nearly 2% decrease in Q2, contrasting with the medium-term guidance of 4% to 6% growth.
- The decline was attributed to a challenging consumer environment, trade down in the smoking cessation category due to price sensitivity, and a shift towards value channels like Dollar and Club, which have higher inventory pressures.

Advil and VMS Share Losses:
- Haleon faced share losses in key brands like Advil and the VMS category, with Advil losing share in Q2 and VMS brands seeing revenue declines in the U.S.
- The share losses were primarily due to competitive pressures from private label brands and other competitors, such as Kenvue's Tylenol.

Increased A&P Expenditure:
- A&P expenditure increased by 130 basis points in the first half, leading to an overall A&P ratio of 20.8%.
- The increase was driven by investments in innovation, geographic expansion, and expert recommendations, despite the company emphasizing productivity improvements and ROI optimization.

EMEA and LatAm Growth:
- EMEA and LatAm regions showed strong growth, with volume growth accelerating from 0.5% in Q1 to 1.6% in Q2.
- This growth was attributed to successful innovation in clinical ranges like Otrivin and Panadol Dual Action, as well as geographic expansion in key markets such as India and EMEA.