Shares in Unilever (UL) melted slightly today despite strong demand for ice cream helping it to lick Q2 sales forecasts.
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The group, whose products include Dove soap and Marmite, said underlying sales for Q2 came in 3.8% higher, beating expectations of 3.6%. Sales growth for the first six months was up 3.4%.
However, first-half profit before taxation fell 8.5% to €5.09 billion from last year’s €5.57 billion. Earnings per share were €1.42, down 3.7% from €1.47 a year ago.
Ice Dream
Demand, particularly in North America and Europe, was helped by the performance of its ice cream arm, which makes Ben & Jerry’s, Magnum and Calippo. It saw sales rise by 7.1% in Q2 and by 5.9% in the first six months of 2025.
It said new innovative products had helped drive demand such as the Magnum ‘multisensory’ Utopia range and Cornetto disc cones as well as hotter weather.
The previously announced demerger of the ice cream business will see it become the Magnum Ice Cream Company and float with a primary listing in Amsterdam.
Unilever said this is on track to complete by mid-November, with the company to retain a minority stake worth less than 20%.
The spin-off is part of efforts by Unilever to move further toward beauty and personal care, with less of a focus on food.
It also sold its Vegetarian Butcher plant-based brand earlier this year and confirmed last month it was exploring the potential sale of its Graze snacking line.
It said revenue in its food range was up 2.8% in Q2, helped by demand for flavored mayonnaise.
It said personal care grew by 4.8% and beauty and wellbeing by 3.7%. It has sought to grow the personal care business further in recent months, with deals to acquire the fast-growing Wild and Dr Squatch brands.
More Beauty
Fernando Fernandez, chief executive, said: “Looking ahead, our priorities are clear: more beauty and wellbeing and personal care, disproportionate investment in the US and India, and a sharper focus on premium segments and digital commerce. We are building a marketing and sales machine.”
The company maintained its fiscal 2025 outlook expecting underlying sales growth within the range of 3% to 5%, and an improvement in underlying operating margin versus 18.4% in 2024.
It also expects second-half sales growth ahead of the first half despite subdued market conditions, supported by continued strength in developed markets and improving performance in emerging markets, notably in India, Indonesia, and China.
As one can see below, APAC sales have been declining for the last three years, so an increased focus will be welcome.
“It’s ironic that the one area of Unilever doing best is the part that’s about to be jettisoned,” said Russ Mould, investment director at AJ Bell. “That could help to drive investor interest in The Magnum Ice Cream Company.”
Is UL a Good Stock to Buy Now?
On TipRanks, UL has a Moderate Buy consensus based on 1 Buy rating. Its highest price target is $73. UL stock’s consensus price target is $73, implying a 24.87% upside. These ratings and price targets will likely change as analysts update their coverage after today’s earnings report.
