Unilever's Cleaning Products Power Better-Than-Expected Sales
(Bloomberg) -- Unilever began the year on a better-than-expected note, helped by strong sales in the company’s home-care business.
Sales in the first quarter beat analysts’ expectations, with eco-conscious housekeeping products under the Seventh Generation and Omo brands performing especially well. Gains were driven by emerging markets in Asia, providing some reassurance after the company had warned that Latin America would weigh on its performance this year.
The shares rose as much as 1.2 percent early Thursday in Amsterdam.
Unilever’s growth fell short of the high bar set by Nestle SA, which also reported sales that beat expectations on Thursday. Danone SA said earlier this week that its sales were held back by slowing demand for its baby-food products in China.
Underlying sales rose 3.1 percent in the first quarter, the Anglo-Dutch company said Thursday. Analysts expected 2.8 percent. Unilever said sales were boosted by price increases, some of which were enacted to offset rising commodity costs tied to raw materials in food and petrochemicals used in detergents.
Growth was balanced between volume and price increases, the company said. While consumer-goods giants have struggled to raise prices for mainstream product lines in recent years as shoppers shift to cut-price and niche labels, they’ve been snapping up smaller, faster-growing brands. Unilever said acquisitions made since 2015 collectively grew at a double-digit rate in the first quarter.
The quarter marks the first full financial period in which Chief Executive Officer Alan Jope has led the maker of Dove soap and Ben & Jerry’s ice cream, during which he reshuffled management to spark growth amid economic woes in Latin America.
The company said it still expects growth for the full year to be in the lower half of its 3 percent to 5 percent estimate range.
Unilever shares have risen 7 percent so far this year.
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