Unilever growth cools off as ice cream sales hit by colder summer

UNILEVER has posted muted growth in the third quarter, missing City forecasts after a slowdown in key international markets and weaker growth in ice cream.

The Marmite and Ben & Jerry’s manufacturer reported weaker-than-expected sales in the past three months due to softer demand in China and India.

However, shares in the consumer giant increased after it posted sales of €13.3bn (£11.5bn) on the back of 2.9% underlying sales growth.

Total turnover increased by 5.8% as the business benefited from positive currency exchange rates and acquisitions.

The company’s home care division drove growth, delivering 5.4% underlying sales growth as it was boosted by double-digit growth for Cif cleaning products.

Beauty and personal care sales increased by 2.8% after strong sales of deodorants.

Food and drink delivered lower growth as sales rose 1.7% due to higher pricing as volumes slipped lower.

The volume decline came as ice cream brands such as Ben & Jerry’s and Magnum failed to match strong sales in 2018 due to cooler summer temperatures this year in Europe.

Tea also delivered modest growth through the Pukka and Lipton brands.

Unilever reported a “market slowdown” in India, while sales declined 0.3% in Europe due to “difficult” retail conditions.

Alan Jope, chief executive officer of Unilever, said: “We have maintained momentum in the quarter, with a good balance between volume and price. Emerging markets and home care have been the key growth drivers.

“We are committed to delivering superior long-term financial performance and balanced, compound growth of the top and bottom line through our sustainable business model.”

Russ Mould, investment director at AJ Bell, said: “A weak showing for the shares heading into today’s announcement suggests investors were fearing the worse.

“Nonetheless, the continuing pressure on sales in developed markets, which fell 0.1%, does reflect the structural challenge facing big brands as more of us look to buy local products which are perceived to have more integrity.”

Shares in the company increased 2.1% to 4,704p in early trading.