Anglo-Dutch food and consumer goods giant Unilever has reported a 6% rise in quarterly net profit, despite a 4% fall in turnover.
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The company posted net profit of €883m (US$1.1bn) for the third quarter, compared to €830m in the same period of the previous year. Group turnover, meanwhile, was €10.59bn, down from €11.02bn a year earlier.
Underlying sales declined by 1.3% with a particularly poor performance in Western Europe, including significant declines in ice cream and ready-to-drink tea. Within this, leading brands, now 95% of the portfolio, declined by 0.9% in the quarter.
In September the company lowered its earnings outlook for the full year following poorer-than-expected sales in July and August and pressure on some of its market positions. The revision includes an increase in investment behind the company’s brands in order to return to growth.
Unilever said market conditions remain difficult in a number of important European countries.
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By GlobalData“Weak consumer confidence, the continued growth of ‘discount’ retail formats and the response of traditional retailers puts increased emphasis on the need for brands to offer good value,” the company said, adding that European sales had also been impacted by poor summer weather.
In North America, Unilever said Slim-Fast market shares have stabilised since the start of the year, but year-on-year sales were still significantly down in the quarter. In September the company launched the new Slim-Fast Optima range as part of the revitalisation of the brand. Ice cream continued to make good progress through Good Humor, Breyers and Ben & Jerry’s. There was strong, broad-based growth across the rest of the food portfolio with Skippy, Lipton, Bertolli, Country Crock and I Can’t Believe It’s Not Butter! all growing well, Unilever said.
