Pandemic Buying Patterns Drive Unilever Sales in North America
By Saabira Chaudhuri
LONDON -- Unilever PLC said American shoppers are still stocking
up on its hand sanitizer and condiments such as Hellmann's
mayonnaise, as they weather the ebb and flow of the coronavirus
pandemic by washing their hands, staying home more and cooking for
Key emerging markets are also bouncing back, led by Brazil,
where government subsidies have energized consumer spending. Both
trends delivered strong sales growth at Unilever, the maker of Ben
& Jerry's ice cream and Dove soap.
North American underlying sales -- which strip out currency
moves and deal making -- grew 9.1% in the third quarter compared
with the same period a year ago, a roaring pace for a market that
has in recent years delivered paltry growth. Most of that came from
higher volumes, instead of price increases.
Unilever shares were down 1.4% in early trading.
Mayonnaise, Sir Kensington's line of condiments and ice cream
brands such as Talenti powered sales were big sellers. With the
U.S. still wrestling with rising Covid-19 outbreaks in many places,
sales of cleaners -- from Dove soap to Suave hand sanitizer -- were
"The U.S. drivers were around hygiene, in particular hand
sanitizer," Chief Financial Officer Graeme Pitkethly said Thursday,
after the company released sales figures. He also said the company
was "seeing very, very strong growth in the foods portfolio. This
is all about in-home consumption."
Unilever's beauty and personal-care unit, which includes brands
such as Dove and TreSemme shampoo, also performed better than
expected globally. Mr. Pitkethly said increased hand washing helped
outweigh a continued slump in the use of deodorants, skin care and
hairstyling products, which have suffered as people spend more time
In Brazil, one of Unilever's largest emerging markets, President
Jair Bolsonaro is funneling generous cash payments to millions of
poor to help them ride out the economic storm.
"We saw quite a bounce back in Brazil," Mr. Pitkethly said. In
Argentina, another big market, Unilever was able to raise prices
and boost revenue.
Unilever differs from its big global peers, such as Procter
& Gamble Co. and Reckitt Benckiser Group PLC, because its
emerging market footprint is substantially larger than its presence
in developed markets, often making for volatile results in
individual countries. Investors have been closely focused on
whether Brazil, India and other hard-hit emerging economies would
recover in the third quarter. Many did, but all for different
Emerging market underlying sales jumped 5.3% in the quarter,
year-over-year, while developed market sales were up 3.1%. In the
previous quarter, sales in the emerging world declined, hitting
their lowest level on record.
Mr. Pitkethly said the situation in India, where strict
lockdowns had disrupted its supply chain, had improved as those
strictures eased. Production is back to full capacity.
Growth in China accelerated by double digits, as restaurants and
cafes reopened, boosting Unilever's "out of home" sales. Demand
also picked up for beauty and personal-care products as economic
activity picked up.
Overall, the company reported third-quarter underlying sales
growth of 4.4%. That is up from 2.9% a year earlier and well above
analyst estimates for 1.3% growth. Total reported sales fell to
EUR12.93 billion, equivalent to $15.32 billion, compared with
EUR13.25 billion a year earlier. Sales were hurt by big currency
Write to Saabira Chaudhuri at firstname.lastname@example.org
(END) Dow Jones Newswires
October 22, 2020 07:15 ET (11:15 GMT)
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