By Richa Naidu and Yadarisa Shabong
(Reuters) -Reckitt said on Wednesday short-term sales of some of its Mead Johnson baby formula powder are likely to be affected after a tornado struck a third-party warehouse in Indiana that sustained significant damages.
The Mount Vernon warehouse, currently not operational after the tornado struck on July 9, is an important site for Mead Johnson Nutrition business that contains both raw materials and finished products, Reckitt said.
All employees are safe, the company said, adding that it has diverted all inbound deliveries to other warehousing facilities in the United States.
Some Nutrition SKUs (product varieties) will likely be affected in the short term, a Reckitt spokesperson said.
“We are partnering with customers and suppliers on expedited recovery efforts to minimize disruption by leveraging our global supply chain and managing inventory at our other U.S. warehouses,” they added.
The company said Reckitt has comprehensive property damage and business interruption insurance, which it expects will largely offset the impact on earnings.
This marks the third bit 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 $60 million 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.
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips and Louise Heavens)
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