Stronger than expected pricing prompted Unilever’s organic sales growth to beat expectations comfortably in Q2, according to financial services firm, Matrix.
Unilever’s sales grew by +7.1% in the second quarter, up from +4.3% in Q1.
According to Matrix, the scale of the acceleration in Q2 was due to substantial pricing, which offset higher input costs.
Underlying operating profit was in line with expectations, assisted by A&P spend (advertising & promotional spend) as a portion of sales being down from a year earlier.
Matrix said Unilever’s shares should benefit from the pleasant surprise on top-line growth, even if conversion to underlying EPS expansion was only in line with expectations.
With a combination of defensiveness and more focused management in charge of its categories, there is scope for decent upside from the current price, it said.