Investing.com -- Unilever's sales grew at a faster-than-anticipated pace in the third quarter, as the consumer goods giant said its push to reinvigorate the performance of the business was on track.
The group behind brands like Hellmann's mayonnaise and Dove soap also reiterated its annual financial forecast for underlying sales expansion 3% to 5% and an underlying operating margin of at least 18%.
In a trading statement, Chief Financial Officer Fernando Fernandez added that margins will rise on a year-on-year basis in the second half, although the growth will be "smaller than in the first half" due to tough comparisons and some increases in input expenses.
Meanwhile, Unilever (LON:ULVR) Chief Executive Hein Schumacher said work is "progressing well" on the firm's planned separation of its ice cream business and a broader turnaround effort that has included 7,000 job cuts.
"[T]he operational improvements we are making [...] help to explain the stronger, more consistent level of delivery we are now experiencing," Schumacher said. "As part of that, I am pleased that we are starting to see the positive impact from scaling fewer, but bigger, innovations across our markets."
Underlying sales rose by 4.5% in the third quarter, topping a company-compiled consensus forecast of 4.2%, thanks in part to strong demand for ice creams that helped offset weakness in its prestige beauty brands linked to a slowdown in China and the US. Price growth also moderated in line with its expectations, Unilever noted.
Analysts at RBC (TSX:RY) Capital Markets said the outsized ice cream returns were fueled by tepid comparisons in the prior year, when the unit's organic sales fell by 2.8%. However, they still called Unilever's results "decent."
"[T]he fact that we can view this modest, volume-driven beat relative to company compiled expectations, and reiteration of full year guidance, as uneventful is a testament to the extent to which Unilever has been rehabilitated," the analysts wrote in a note to clients.
Shares in Unilever advanced by more than 3% in early London trading on Thursday.