Unilever raised its full-year volume growth outlook after a strong third quarter, driven by its personal and home care brands and emerging markets.
The consumer goods group said underlying sales rose 5.2% in the quarter, with volumes up 2.9% and prices up 2.3% as it raised prices to offset higher commodity costs. Its home care division grew 9.1% and personal care 6.3%, while its foods business was flat, held back by weak demand in developed markets, particularly US condiments.
“We have delivered another quarter of competitive growth, led by continued strong volume delivery and a step up in price to offset the impact of higher commodity costs. Our Power Brands continued to lead performance, with strong growth across Home Care, Personal Care and Beauty & Wellbeing,” said CEO Fernando Fernandez.
Emerging markets have long been a core growth driver for Unilever and were again the standout, with sales up 9.5%. India grew 15%. Turnover rose to €13.3bn.
On the strength of the performance, Unilever said it now expected underlying volume growth of at least 3% for the full year.
It raised its dividend 3% and said its plan to combine its foods business with McCormick, turning Unilever into a focused personal and home care company, was on track.
“Unilever’s third-quarter update should reassure that the consumer goods giant remains on track despite a challenging backdrop. Underlying sales growth of 5.2% came in ahead of expectations, driven by a combination of price increases and improving volumes, highlighting the resilience of demand for its key brands even as consumers remain cautious about spending,” said Garry White, Chief Investment Commentator at Raymond James.
“Continued strengthening in volume growth suggests the company is becoming less reliant on pricing to drive revenues, with sales growth increasingly reflecting genuine underlying demand. Overall, this is a strong result that should please both management and shareholders.”