By Joshua Kirby

Consumer-brands company Unilever said it is on track to meet its goals for the year after first-quarter sales were boosted by its heavyweights, a solid start to a year set to be marked by a turnaround plan under a new chief executive and a spinoff of its ice-cream business.

Underlying sales growth rose 3% from the same period last year, supported by performance at stand-out brands like Dove, where sales grew more than 8%, Unilever said Thursday. Turnover, however, slipped 0.9% on year compared with the same quarter last year, standing at 14.8 billion euros ($16.75 billion,) dragged by net disposals and some currency effects, the company said.

Analysts had expected turnover to come in at 15.09 billion euros and for underlying sales growth to rise 2.8% on year, according to a consensus of estimates provided by the company.

Coming broadly in line with expectations, the results aren't likely to spark upgrades to analyst expectations for the company's earnings this year, RBC Capital Markets analysts James Edwardes Jones and Wassachon Udomsilpa wrote in a note to clients after the update.

"There are signs of progress at Unilever given its reorganization and new strategy; however we think it will take time," they said.

It marks the first performance update since the group in February unexpectedly jettisoned its chief executive after two years at the tiller, replacing him with veteran finance chief Fernando Fernandez. The move surprised analysts, but the group's Chairman Ian Meakins said that Unilever still has "further to go" to deliver optimal performance.

The group has for years faced analyst and investor pressure to reinvigorate growth across its sprawling portfolio while contending with rising input costs, changing consumer trends and broad economic uncertainty.

Fernandez inherited a turnaround plan that involves cutting thousands of jobs and a spinoff of Unilever's ice-cream business, which includes Ben & Jerry's. The eponymous founder of the socially-minded confectioner, Ben Cohen, has called on Unilever to "set us free" and allow the brand to again stand alone as a separate company. Unilever said that Ben & Jerry's is an important part of the ice-cream business, and it isn't for sale as a stand-alone brand.

The new business--which Unilever said will take the name of another of its brands, Magnum--will operate as a stand-alone business by the summer and will be reported separately as of the fourth quarter, Unilever said. Magnum will be listed in Amsterdam, London and New York, the same exchanges as the parent group.

On the back of the continued sales growth, Unilever reconfirmed its outlook for the full year, including sales growth of 3%-5% on year and a "modest improvement" in the operating margin, which stood at 18.4% in 2024.

"Heightened global macroeconomic uncertainty is a fact; however the quality of our innovation program, the strong investment behind our brands and our improving competitiveness give us confidence we will deliver on our full-year plans," Fernandez said.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

April 24, 2025 03:01 ET (07:01 GMT)

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