Unilever reported first-quarter sales growth in line with estimates as the consumer-goods maker grappled with lower prices and ebbing demand for its goods around the globe.
Underlying sales increased 4.7 per cent, Unilever said in a statement Thursday, compared with the 4.6 percent analyst estimate. Growth slowed from 4.9 per cent in the fourth quarter, as the maker of Dove soaps and Axe body sprays struggled with weaker volumes and a deflationary environment that’s made it hard to raise prices.
"What we’ve got is a very, very mixed pricing environment around the world; it’s very important to focus in these times on volume and not price," Chief Financial Officer Graeme Pitkethly said by phone. Europe is very competitive due to heavy discounting from rivals and prices are lower than the historical averages in Asia, he said. Pricing increased 2 percent in the quarter, below the 2.4 per cent analyst estimate.
Unilever and rivals such as Nestlé SA are being hurt by lower consumer prices in Europe and North America for products such as margarines and soup mixes. To mitigate this, Chief Executive Officer Paul Polman is pushing out new, higher-margin deodorants, detergents and shampoos. He’s also appointed a new leader to reinvigorate the struggling spreads business, whose sales continued their multi-year decline in the quarter.
Unilever shares fell 1.6 per cent in early Amsterdam trading, giving the company a market value about €121 billion ($136 billion).
Underlying sales exclude acquisitions, divestments, and currency fluctuations.
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