London: Unilever reported second-quarter sales growth that beat estimates as the maker of Ben & Jerry’s ice cream delivered sales gains in deodorants and hair-care products.
Underlying revenue rose 4.7%, London- and Rotterdam-based Unilever said Thursday, compared with the 4.5% median estimate of 22 analysts surveyed by Bloomberg. Growth remained steady with the first quarter, yet the gains came mostly from higher prices for its goods as sales volumes slowed. The shares gained as much as 1.9% in early Amsterdam trading.
“We expected there to be a lot of volatility and a slowdown in many markets and we’d set the business on course for that,” chief financial officer Graeme Pitkethly said by phone. The company is pleased with the 2.9% volume growth in emerging markets in the first half of the year, and sees the potential to eventually return to the 5% growth it’s seen in previous years if volatility abates, Pitkethly said.
Unilever shares have climbed since Britain’s vote to leave the European Union, benefiting from the potential boost to earnings from the falling pound. Sales outside the UK account for more than 90% of the company’s revenue. Unilever is seeking to offset waning demand by expanding newer categories like its male-grooming business, and this week bought mail-order razor company Dollar Shave Club in a $1 billion deal.
Profit margins widened by 50 basis points to 15% in the first half, the company said, beating analysts’ estimates thanks to cost-saving measures and lower marketing spending as a percentage of sales. Markets slowed in the quarter, Unilever said, with low growth in emerging regions and declines in both Europe and North America. Underlying sales exclude acquisitions, divestments, and currency fluctuations. Bloomberg