Unilever’s second-quarter sales top estimates

Unilever reported higher-than-expected quarterly sales on Thursday, driven by gains in its home and personal care units, and stood by its full-year outlook.

The results provide evidence that the Anglo-Dutch maker of Dove soap, Lipton tea and Ben & Jerry’s ice cream is recovering from a weak 2014, when its business was hammered by slowing emerging markets and currency devaluations. Still, it warned that consumer demand remained weak.

“Emerging markets continue to be subdued whilst in Europe and North America growth is negligible,” Unilever said in a statement.

"If there was one place where you could feel things are getting slightly better it was North America, but it's all one step forward, two steps backward," Chief Financial Officer Jean Marc Huet told Reuters.

Unilever, which is becoming less of a food company and more reliant on products such as washing powders, shampoos and deodorants, said underlying sales rose 2.9 per cent in the second quarter, versus analysts’ average estimate for a gain of 2.6 per cent, according to a company-compiled consensus.

Sales volume, which measures the amount of goods sold, rose 1.3 per cent, while pricing rose 1.5 per cent.

“Quite good all around,” said analysts at RBC Capital Markets, highlighting the volume gain, since price increases had become slightly distorted due to the need to offset currency volatility.

Unilever shares traded 2.3 per cent higher in London by 0715 GMT.

For the first half of the year, the company’s operating profit was €3.8 billion, in line with analysts’ estimates.

Unilever said it was planning for “another year of volume growth ahead of our markets, steady improvement in core operating margin and strong cash flow”.

Huet repeated his expectation that full-year sales growth would probably come in at the upper end of its previously stated goal of 2 to 4 per cent.

Reuters