Unilever delivered a better-than-expected sales performance last quarter thanks to strong growth in beauty and wellbeing as its new turnaround strategy began to take shape.
The FTSE100 company is opting to focus more on beauty, wellbeing and personal care products under new CEO Fernando Fernandez, while spinning off its ice cream business later in the year.
Its latest results gave justification for this course of action, with beauty and wellbeing the fastest-growing business, while ice cream was the only division not to grow volumes.
The company’s underlying sales grew 3.9% to €14.7bn, beating analysts’ expectations of 3.7%, with volumes up 1.5%.
Fernandez reiterated Unilever’s new strategy of “more beauty, wellbeing and personal care, prioritising premium segments and digital commerce, and anchoring our growth in the US and India.”
Unilever reiterated its outlook for the full year, with underlying sales to grow between 3% and 5%. It said second half growth would be ahead of the first half, despite subdued market conditions.
Earlier this week, Unilever said it had been forced to delay the spin-off of its ice cream division due to the ongoing US government shutdown, although it still expects it to go ahead this year.
Ice cream made up 16% of Unilever’s turnover last quarter, with its 3.7% growth entirely propelled by price rises.
Unilever said it was focused on strengthening the business ahead of the spin-off through “an exciting product pipeline, designing more efficient go-to-market strategies, optimising our supply chain, and building a dedicated sales team globally”.
North America was one of its best performing regions, with underlying sales growth of 5.5% driven by personal care, beauty and wellbeing. In Europe, underlying sales growth grew 1.1%.
In India, Unilever’s other priority market, underlying sales growth was 2%, reflecting a transitory negative impact from the country’s tax reforms.
“The reforms are anticipated to support long-term demand improvement across key categories, with trading conditions expected to normalise from November,” Unilever said.
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