LONDON—Unilever PLC reported Thursday an 18% slump in profit for
the first half of the year as the consumer goods giant logged
slower sales growth and came up against a tough comparison with a
year-earlier period helped by gains on a sale.
The maker of Magnum ice cream, Dove soap and Axe deodorant
posted a first-half net profit of €2.49 billion ($2.72 billion),
compared with €2.82 billion for the same period last year, on
revenue that rose 1.8% to €26.99 billion.
Diluted per-share earnings fell 10% to €0.87 as Unilever's
results were compared with a year-earlier period that was buoyed by
gains tied to the sale of its pasta sauces brands in the U.S. On a
core basis, which excludes one-time items and currency movements,
earnings rose by 8%, helped partly by a share buyback.
Underlying sales—which strip out the impact of acquisitions,
disposals and currency movements—grew 2.9%, compared with 3.7% in
the same period last year.
Sales in emerging markets, where Unilever did 57% of its
business last year, grew 6% on an underlying basis, down slightly
from the 6.6% growth the company reported last year.
In North America, Unilever's sales had been helped by a stronger
dollar in contrast to the previous year when it and other European
consumer-goods companies blamed currency swings for eating into
sales. But in the first half, sales edged down 0.9% on an
underlying basis.
Unilever has been pushing more high-end products in Europe and
North America, as the company works to offset a constrained mass
market in these regions along with slower growth in emerging
markets. Since March, Unilever has acquired four premium skin-care
brands—Murad, Dermalogica, Kate Somerville and REN—that sell at
drugstores and specialty-retail locations like professional salons
and spas.
The personal care arm—Unilever's largest—grew sales by 3.3% amid
increases in both volume and price. Unilever said it expects growth
to accelerate in the second half of the year. However, the unit's
operating margin declined by 20 basis points as the company spent
more on marketing.
Overall, the company has been taking incremental steps to shift
its product portfolio away from slower-growing food and toward
higher-margin personal care products and was recently reclassified
on the S&P and MSCI indexes from packaged food to personal
products.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
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