Unilever shares are down by 2.88% in early trade on Thursday as volumes dipped by 0.6% in Q3 amid continued efforts to win over consumers during the post-pandemic recovery.
In Q3, underlying prices surged by 5.8%, outpacing analyst expectations, while volumes dipped by 0.6%. In Europe, volumes experienced a significant decline of 10.7%.
Unilever announced a 5.2% increase in underlying sales, aligning with the average forecast from analysts, as indicated by the company’s consensus provided to Reuters.
The group’s sales amounted to €15.2 billion, showing a 3.8% decrease, consistent with anticipated figures.
Unilever’s new chief executive, Hein Schumacher, said that “our performance in recent years has not matched our potential. The quality of our growth, productivity, and returns have all been under-delivered”.
The packaged goods sector was hit hard by COVID regulations and the aftermath of the pandemic in the last couple of years. Prices for products themselves, packaging, and delivery surged, forcing many consumers to switch to cheaper alternatives to Unilever products, both during and after the pandemic.
Matt Britzman, equity analyst at Hargreaves Lansdown, said in a comment to UK Investor Magazine that, in his opinion, “Marmite Maker delivers a decent third quarter, though volumes were a little lower than expected. It looks like consumers are struggling to justify forking out extra for a tub of Ben & Jerry’s as ice cream sales continue to struggle.”
Looking into the future, Matt Britzman added that “aside from the usual trading details, the new CEO, Hein Schumacher, provided further information on his plans to drive performance into another gear. Trimming the portfolio has already been on the cards, so it’s not too surprising to hear a renewed focus on some of the largest brands, which represent over 70% of sales. Getting gross margins moving back in the right direction is the real key”.