Unilever beat first-half profit expectations on Thursday, boosted by resilient pricing, even as sales growth disappointed. Shares in the maker of Dove soap and Hellmann’s condiments rose 6.8% in early trading, reaching the top of London’s FTSE 100 index. Unilever posted a 3.9% rise in second-quarter underlying sales, slightly below the 4.2% increase expected by analysts. The company maintained its full-year underlying sales growth forecast of 3% to 5%, mostly driven by volume, with a forecast for an underlying operating margin of at least 18%, stronger than the market view.
Switzerland’s Nestle also reported lower than expected half-year sales growth on Thursday and lowered its full-year outlook. Unilever CEO Hein Schumacher stated, “There is much to do, but we remain focused on transforming Unilever into a consistently higher-performing business” in a statement.
Consumer goods makers have been easing their price increases to attract back shoppers who traded down to cheaper, often private label products due to the global cost of living crisis.
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%. Unilever’s underlying operating profit rose 17% to 6.1 billion euros ($6.61 billion) for the six months to June, beating market expectations of 5.44 billion euros. Its underlying operating margin widened by 250 basis points to 19.6%, although the company expects that to slow in the second half.