Apr 20, 2017

Unilever finds innovations boost pricing power

Unilever's organic sales growth in personal care was 3.1 per cent, outshining forecasts of 1.8 per cent. Although group underlying sales volumes fell by 0.1 per cent, total organic sales growth came in at 2.9 per cent - 100 basis points better than forecasts and proving that pricing was 3 per cent stronger. Tellingly, this pricing power was strongest in emerging markets, where sales growth hit 6.1 per cent on volume growth of just 0.8 per cent. In addition to more favourable commodity prices and competitive environments, Unilever also suggested many emerging markets' currencies were bottoming out - bringing a more normalised pricing dynamic. Investors should be delighted, as it suggests the 3.1 per cent rise in clothing and homeware sales M&S achieved in the last quarter of 2016 is being studiously ignored.

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