Unilever reports Q3 sales rise; warns of further inflation next year

Unilever reports Q3 sales rise; warns of further inflation next year

THE WHAT? Unilever has reported a Q3 sales growth of 2.5 percent, up on the 2.2 percent analyst predictions. However, it warned of further inflation next year due to surging energy and other costs.

THE DETAILS The personal care giant maintained its full-year guidance, with Q3 growth boosted by strong demand in its ‘priority markets’ of U.S., China, India and Turkey. South East Asia reported a volume decline in the quarter, impacted by COVID-19.

Deodorants and skin cleansing products outperformed as consumers were allowed out following lockdown measures, with a 4.1 percent increase in prices offsetting a 1.5 percent decline in volumes. 

The company’s e-commerce channel grew 38 percent and now represents 12 percent of total sales. 

According to a press release, “Prestige Beauty and Functional Nutrition each grew double digit and we completed the acquisition of digitally-native skin care brand Paula’s Choice.”

THE WHY? While Unilever managed to beat industry expectations, the company joins its competitors in falling foul of soaring raw material prices and transport costs, which is ultimately set to continue over the next 12 months. 

Unilever plans to continue offsetting the costs with price rises and other measures. 

The company said, “Cost inflation remains at strongly elevated levels, and this will continue into next year. We have and will continue to respond across our categories and markets, taking appropriate pricing action and implementing a range of productivity measures to offset increased costs. We continue to expect that we will deliver in line with our margin guidance of around flat for the full year.”