Investors still depressed after last week’s disappointing results from Danone and Nestlé were cheered this week by bumper sales growth from Unilever and Reckitt Benckiser.
Unilever reported like-for-like third-quarter sales growth of 5.9% - substantially ahead of the 5% analysts had forecast, and the figures Danone and Nestlé reported the week before.
Despite the poor UK summer, the Anglo-Dutch giant managed to grow its sales of ‘refreshment’ brands, which include Liptons and Wall’s, by 6.8%. Its shares climbed 3% to £23.30 in early trading on Thursday. “We stated that Q3 was Unilever’s opportunity to show its strength and reliability,” said Bernstein analyst Andrew Wood.
Reckitt Benckiser also beat expectations, reporting a 5% increase in like-for-like third-quarter sales, which included a 2% improvement in sales in North America and Europe, where analysts had expected a small drop. Shares leapt 4% on the news, to a record high of £37.68.
Shares in Premier Foods climbed sharply despite news it had lost a £75m contract to supply own-label and Hovis bread to The Co-op Group (see left). Its shares rose 6% on Tuesday to 83.7p, buoyed by a small improvement in like-for-like sales growth to 2% in the third quarter from 1.1% in the first half. “It was a decent performance, considering it was delivered against a backdrop of lower marketing spend due to the Olympics,” said Panmure analyst Damian McNeela.
Pernod Ricard added to fears of a slowdown in China this week. Although like-for-like growth in Asia/rest of the world was 11%, it was below expectations and Pernod said China had “a difficult economic backdrop”. Shares slipped a fraction to €84.40 in early trading on Thursday. Last week, rival Diageo reported quarterly like-for-like sales growth of just 2% in Asia-Pacific.
British American tobacco shares also dropped slightly to £31.64 on Wednesday after nine-month like-for-like volumes slipped 1.8%, dragged down by poor results in Brazil and Japan.
It was a better week for Magners owner C&C Group, whose shares rose 2% on Tuesday to €3.82 after a 2% drop in six-month sales was considered fair given the wet weather. It also agreed a £190m deal to acquire Vermont Hard cider company in the US (see p27).