Consumer goods maker Unilever reported lower-than-expected second-quarter sales on Thursday, hurt by a Brazilian transport strike and weak pricing.
The Anglo-Dutch maker of Ben & Jerry's ice cream, Dove soap and Hellmann's mayonnaise said underlying sales rose 1.9 percent, excluding the recently divested spreads business.
On that basis, analysts on average were expecting growth of 2.3 percent.
Sales Below Estimates
For the first half of the year, underlying sales growth excluding spreads was 2.7 percent, below estimates of 3 percent.
First-half turnover excluding spreads fell 4.8 percent to €24.9 billion, hurt by currency fluctuations.
The company stood by its forecast for full-year growth of 3 to 5 percent, helped by price increases.
Chief Financial Officer Graeme Pitkethly told Reuters the pricing outlook should improve in the second half, as currency fluctuations drive up commodity costs in local currencies.
Underlying earnings per share for the first half rose 7.8 percent to €1.22.
Volume-Driven Growth
“Our first half results show solid volume-driven growth across all three divisions, which was achieved despite the effects of an extended truckers’ strike in Brazil, one of our biggest markets,” commented Unilever chief executive Paul Polman.
“Growth was driven by strong innovation and continued expansion in future growth markets. The margin improvement was of high quality and in line with our strategy, driven by further gross margin progression, increased investment behind our brands and strong savings delivery.”
On the coming year, Polman said that the group’s outlook for the year was largely unchanged.
“We expect underlying sales growth in the 3% - 5% range, an improvement in underlying operating margin and strong cash flow,” he said. “We remain on track for our 2020 goals.”
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
