Unilever blames bad weather for lacklustre sales

Mark Johnson's picture

On potentially the hottest day of the year Unilever’s half year results have come in slightly below expectations, which the firm has blamed on bad weather hitting ice cream sales.

The maker of household brands such as Ben & Jerrys ice cream and Dove soaps said that underlying sales grew 3.3%, with volume growing 1.2% and price 2.1%.

In the second quarter Unilever said growth was suppressed by around 50bps due to weak ice cream performance; a result of poorer weather, particularly in Europe following two years of very strong summers.

Unilever’s Beauty & Personal Care division saw underlying sales grow 3.3%, with 1.7% from volume and 1.6% from price.

Deodorants performed well, supported by the firm’s Rexona Clinical and Dove Zero aluminium ranges, alongside the extension of Love, Beauty & Planet. 

New formats continued to drive sales in skin cleansing, including the incremental launch of Dove bath bombs as well as Dove foaming handwash. 

In home care, underlying sales grew 7.4%, with 2.8% from volume and 4.5% from price. Fabric solutions performed strongly, benefiting from ‘premiumisation’ and the execution of the firm’s strategy to move consumers into products with additional consumer benefits, including Omo Perfect Wash in Brazil. 

And in the firm’s Foods & Refreshment division underlying sales grew 1.3%, with (0.1)% from volume and 1.4% from price. The flat performance was partially offset by sales of Pukka teas, and - despite the poor reading overall for ice cream - good sales in Magnum ice creams and the introduction of a burger dipping sauce from Hellmans.

"We have delivered consistent growth within our guided range for 2019, led by our emerging markets”, said Unilever CEO, Alan Jope. 

“Accelerating growth remains our top priority and we continue to evolve our portfolio and seek out fast growth channel and geographical opportunities, as well as address those performance hotspots where growth is falling short of our aspirations.

“For the full year, we continue to expect underlying sales growth to be in the lower half of our multi-year 3-5% range, an improvement in underlying operating margin that keeps us on track for the 2020 target and another year of strong free cash flow. 

“Our sustainable business model and portfolio of purpose-led brands are key to delivering superior long-term financial performance."

As the UK prepares for potentially the hottest day ever, perhaps those ice cream sales will give a boost for the second half of the year.

The company’s shares were trading down 1.3% at £49.30 in London on Thursday morning.

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