Unilever beat first-half profit expectations on Thursday boosted by resilient pricing even as sales growth was disappointing.
Shares in the maker of Dove soap and Hellmann’s rose 6.8% in early trade to the top of London’s FTSE 100 index.
Unilever posted a 3.9% rise in second-quarter underlying sales, below the 4.2% increase expected by analysts in a company-compiled consensus.
It maintained its full-year underlying sales growth forecast of 3% to 5% – driven primarily by volume – while its forecast for an underlying operating margin of at least 18% was stronger than the market view.
Switzerland’s Nestlé also reported lower than expected half-year sales growth on Thursday and lowered its full-year outlook.
Unilever’s chief executive Hein Schumacher said in a statement, “There is much to do, but we remain focused on transforming Unilever into a consistently higher performing business.”
After a protracted global cost of living crisis, some consumer goods makers have been easing their price increases, hoping to attract shoppers who traded down to cheaper, often private-label products.
Unilever’s underlying price growth for the quarter was less than expected at 1% but underlying volume sales growth ran ahead of estimates at 2.9%.
The industry has struggled with soaring costs for several years, with everything from sunflower oil and shipping to packaging, grain and energy becoming more expensive during and following the pandemic and Russia’s invasion of Ukraine.
Unilever’s underlying operating profit rose 17% to €6.1 billion for the six months to June, beating market expectations of €5.44 billion.
Its underlying operating margin widened by 250 basis points to 19.6%.
However, the company expects that to slow in the second half of the year.
Read More: Nestlé’s Chocolate Prices In Focus Among High Cocoa Costs
