Unilever shares jumped 7% in early trading after the consumer goods giant reported bumper earnings for H1, despite posting lower-than-expected sales growth in Q2.
Turnover increased by 2.3% to €31.1bn and operating profits were also up 7.8% to €5.9bn, driven by the increased focus on Unilever’s ‘Power Brands’ such as Dove and Rexona.
Underlying sales growth increased by 3.9% in the second quarter, however, falling short of the analyst expected projections of 4.2%.
“We are focused on driving high-quality sales growth and gross margin expansion, led by our Power Brands,” said Hein Schumacher, Unilever CEO.
“Over the first half, we made progress on those ambitions.”
Beauty & Wellbeing sales rose by 7.1%, which was supported by strong hair care sales from Sunsilk.
Unilever said the UK hair care brand has performed well since its 2023 relaunch, particularly across Latin America.
Dove, meanwhile, grew by high-single digits following the launch of Scalp + Hair Therapy, which was formulated to improve scalp health and hair density.
The increased sales helped to offset a slowdown across Prestige Beauty in the US.
Schumacher acknowledged the challenges present in the market, particularly across skin care.
“We are also seeing [slowdown] in China, so we don’t believe it is structural as there is a different performance by brands - some brands beat the trends or stick with them,” he added.
“We have strong brands and are capable of investing more in them… it may last for a bit we don’t see our long-term prospects changing.”
Overall Personal Care sales increased by 5.6%, led by continued strong sales of deodorants.
Underlying sales growth was lowered to be between 3% to 5% for the remainder of the year, but Unilever expects its Growth Action Plan to improve sales in the second half of the year.
The plan is largely focused on supporting and investing its 30 ‘Power Brands’,
It also includes optimising its portfolio and moving into the premium segments, which was seen with the recent acquisitions of K18 and Yasso.
This has also seen the business offload Elida Beauty, Dollar Shave Club, and Suave in North America.
“We continue to embed the Growth Action Plan, doing fewer things, better and with greater impact,” added Schumacher.
“There is much to do, but we remain focused on transforming Unilever into a consistently higher-performing business.”
