Dallas, Texas 07/23/2015 (Financialstrend) – Consumer goods giant Unilever N.V. (ADR) (NYSE:UN) posted second-quarter sales growth that beat estimates, thanks to unexpected gains in Latin America as well as a rebound in China. Sales for the quarter were up by 2.9% against consensus estimates of a 2.6% growth. However, an 18% slump in profits for the first half of the year compared to last year should be a point of concern to shareholders.
North America Sales UP On Strong Dollar
The maker of Magnum Ice Cream and Dove Soap reported first half net profit of EUR2.49 billion compared to EUR2.82 billion reported for the first half of last year. Sales in North Africa received a boost from a stronger dollar compared to last year as other European consumer goods companies shift their blame to currency headwinds for poor performance on sales.
Unilever N.V. (ADR) (NYSE:UN) has slowly been shifting its focus to markets in Europe and North America as it tries to offset constraints in mass markets as well as weaknesses in emerging markets. Sales growth in the quarter also received a boost from the Easter holiday. However, sales in Europe were down by 0.9% mostly affected by currency headwinds.
Developed markets registered a 6% growth in sales with China sales also showing signs of growth thanks to the ongoing partnership with Alibaba Group Holding Ltd (NYSE:BABA). Latin America also registered a 13% growth in sales at the back of the ongoing economic turmoil in the region.
Shift of Focus to Personal care Products
Acquisitions are steadily playing a big role in the company’s push for growth, Unilever having acquired four new premium skin care brands in the name of Murad, Dermalogica, Kate Somerville and REN. Sales from the personal care arm were up by 3.3% in the quarter amidst an increase in both volume and price.
Unilever N.V. (ADR) (NYSE:UN) has slowly been shifting its focus from slower growing food to higher-margin personal care products. The Foods business led by Knorr stock cubes and Hellmann’s mayonnaise was flat for the quarter.