Unilever's third-quarter sales surge and lift full year hopes

Household goods giant Unilever posted a jump in revenue in the third quarter and said it now expects underlying sales growth for the year to be towards the top end of its target range.

Turnover increased by 9.4% to $13.4bn, including a positive currency impact of 2.9%, while underlying sales growth was 5.7%. The company said growth was helped by some specific factors such as a soft comparator in China, strong ice cream sales and some advanced sales in Latin America.

In emerging markets, underlying sales growth was 8.4%.

Unilever said consumer demand remained fragile in the period and volume growth was barely positive in the markets in which it operates. It added that many emerging markets continued to be weak with currency devaluation pushing up the cost of living and squeezing disposable incomes.

Chief executive officer Paul Polman said: “We continue to see soft global markets with no immediate sign of getting help from an improving global economy.

“We are responding fast to accelerating change and high volatility with a focus on continuous cost management while increasing our organisational agility. We will continue to invest steadily behind our brands, innovations and go-to-market capabilities.

"These actions keep us on track for another year of volume growth ahead of our markets and we now expect underlying sales growth for the year towards the upper end of the 2-4% range. We continue to expect steady improvement in core operating margin and strong cash flow.”

Keith Bowman, equity analyst at Hargreaves Lansdown, said: “Unilever looks to be largely back on track. Quarterly figures are ahead of forecast, with brand investment and product innovation underpinning momentum.”

He added: “In all, investors will be breathing a sigh of relief.”

At 0900 BST, Unilever shares were up 3.8% at 2,894p.