Reckitt's Mead Johnson Baby Formula Faces Supply Chain Challenges After Tornado Hit

Reckitt has reported short-term supply disruptions for its Mead Johnson baby formula after a tornado damaged a vital warehouse in Indiana. While all employees are safe, the company is working with local authorities and leveraging its global supply chain to mitigate the interruptions. This event compounds other challenges Reckitt faced this year, impacting its stock performance.

Reckitt, the British consumer goods company, announced on Wednesday that sales of its Mead Johnson baby formula powder are expected to face short-term disruptions. This follows damage to a third-party warehouse in Mount Vernon, Indiana, caused by a tornado on July 9. The warehouse held essential raw materials and finished products for the Mead Johnson Nutrition business.

All employees are unharmed, Reckitt confirmed, adding that it has redirected deliveries to other U.S. warehouses. While some nutrition product varieties may experience temporary shortages, the company is collaborating with local authorities and regulators to address the issue. Reckitt is utilizing its global supply chain to minimize disruption, similar to efforts during the 2022 U.S. baby formula shortage.

Reckitt also stated that comprehensive property damage and business interruption insurance should largely offset the impact on earnings. However, this marks the company's third setback this year. Earlier challenges included an under-reporting of liabilities in the Middle East and a $60 million jury verdict related to its Enfamil Premature 24 infant formula.

(With inputs from agencies.)