Unilever Eyes Modest Growth to Stabilize Investor Confidence
Unilever is navigating a pivotal moment as it prepares to disclose its first-half 2024 earnings on July 25. Market analysts suggest that even modest growth could offer much-needed reassurance to investors, following a turbulent period marked by strategic restructuring and leadership changes.
The FMCG giant recently announced plans to spin off its ice cream division, home to brands like Ben & Jerry’s and Magnum. This move, coupled with a broader cost-cutting initiative aimed at saving €800 million over three years, reflects CEO Hein Schumacher’s drive to sharpen operational focus and improve performance in its core business segments.
Investor sentiment has been mixed, with shares declining nearly 4% in the past month. This follows a broader trend, as the stock has underperformed compared to some sector peers over recent years. The company’s attempt to reduce product ranges and streamline decision-making is seen as a long-overdue effort to combat sluggish growth and regain competitive edge.
In its first-quarter update, Unilever reported underlying sales growth of 4.4%, driven by price increases rather than volume expansion. Volume sales remained flat, raising concerns that consumers may be pushing back against higher prices. Analysts will watch closely to see if the company can balance pricing power with volume in the upcoming results.
Key markets such as India and China will be under scrutiny, with growth in these geographies seen as essential for long-term recovery. A strong showing in these regions may reinforce confidence in the brand’s ability to achieve sustainable, profitable growth.
Schumacher’s Growth Action Plan — aimed at empowering brand teams and accelerating innovation — marks a clear shift toward accountability and agility. According to Jefferies analysts, the new strategy could boost Unilever’s earnings per share by mid-single digits by 2026, an outlook that will be tested as results roll in.
As the July results approach, the FMCG sector will be watching closely to see whether Unilever can deliver steady progress amidst cost pressures and evolving consumer behavior. Any tangible signs of volume growth or operational gains could signal a turning point for one of the industry’s cornerstone players.