Home » Unilever beats sales estimates, but inflation threatens its forecasts

Unilever beats sales estimates, but inflation threatens its forecasts

by archyw
FILE PHOTO: Unilever headquarters in Rotterdam, The Netherlands, August 21, 2018. REUTERS / Piroschka van de Wouw

Por Siddharth Cavale

Jul 22 (Reuters) – Unilever Plc beat expectations with second-quarter sales growth on Thursday, helped by rising prices and strong ice cream and tea sales, but warned rising raw material costs Premiums would reduce your operating margin for the entire year.

The warning sent the FTSE listed company’s shares down 4.2%, making it the index’s biggest loser in morning trading.

Core sales of soap maker Dove and Hellmann’s mayonnaise rose 5% in the quarter ended June 30, above the 4.8% analysts expected, according to a consensus supplied by the company.

Semi-annual sales rose 5.4%, above the 5.3% forecast, driven by 8.1% growth in its Food and Refreshment division, as coronavirus restrictions began to ease in many markets.

In Europe, ice creams consumed outside the home registered a double-digit increase, while there was also a strong consumption in markets such as Turkey, China and India. Tea sales, including Lipton and PG Tips, also generated strong volume growth in North America, Turkey, Europe and India.

“We believe the full-year outlook will be in the 3-5% growth range, with a primary focus on competitive growth,” CFO Graeme Pitkethly told a news conference.

The company said it now expects full-year recurring operating margins to remain flat compared to the previous slight increase, warning of “more incremental inflation than we saw in the first quarter.” The group also said it had completed the review of its tea business, and foresees for the subsidiary an IPO, a sale or a partnership with another company before the end of October 2021.

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(Reporting by Siddharth Cavale and Indranil Sarkar in Bengaluru; edited by Tomasz Janowski and Keith Weir; translated by Flora Gómez in the Gdansk newsroom)

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