Unilever missed first-half organic sales expectations as a continued slowdown in emerging markets and a lacklustre performance from its food business impacted the group’s top line result.

The Anglo-Dutch FMCG giant booked underlying sales growth of 3.7% to EUR24.1bn (US$32.5bn) in the six months to 30 June, missing consensus expectations of 4.3%.

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The performance of its food business did pick up in the second quarter with underlying sales up 0.7%, compared to a fall of 1.7% in the first quarter, reflecting the late Easter. In the half, underlying food sales fell 0.5%.

The company said markets in Europe and North America remained “challenging” and flagged slowing conditions in emerging markets.

“Our markets have been challenging and we have experienced a further slowdown in the emerging countries whilst developed markets are not yet picking up,” CEO Paul Polman said.

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Nevertheless, Unilever stressed the company is growing “ahead” of its markets and booked a robust performance from its refreshment business, which includes ice cream. Sales at the unit rose 5.1%, with volumes driven by new products including Ben & Jerry’s Cores.

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Unilever is selling under-performing brands in order to boost margins. The company booked a 50 basis point improvement in margins at its food unit but refreshment margins fell 100 bps. On a group-wide basis gross margins remained flat in the half, beating consensus analyst expectations for a 10 bps drop in margin.

First-half operating profit was helped by lower pension costs and increased to EUR4.38bn, up from EUR3.89bn last year. Net income was boosted by a reduction in financing costs, climbing to EUR2.99bn from EUR2.68bn.

After an early dip, shares in the group were up 0.26% at 10:00 BST.

The company reiterated its full-year guidance for volume growth ahead of its markets and margin expansion in the year.

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