Unilever's Q2 'Most Testing' Ever, CFO Says After The Print

Author: Jayson Derrick | July 23, 2020 10:21am

Unilever NV (NYSE:UN)'s CFO said on a conference call that its second-quarter performance is highlighted by "record growth and record declines" across different segments, The Wall Street Journal reported.

What Happened: Unilever reported better-than-expected second quarter results Thursday morning that were driven by strong demand for items associated with the COVID-19 lockdown, ranging from soap and sanitizer products to mayonnaise and ice cream.

Overall, revenue excluding forex and deals were down just 0.3% in the quarter, notably better than the decline of 4.3% the Street was modeling.

Why It's Important: Revenue performed better than expected amid "the most testing" quarter the company has ever seen, CFO Graeme Pitkethly said.

Even sales of the same product performed extremely well and poorly at the same time, he said.

For example, sales of ice cream for delivery that was ordered as part of a third-party meal delivery service or through Unilever's own e-commerce store were strong. But sales of ice cream for out-of-home consumption were down nearly 30% in the quarter.

In addition, total North American sales were up 9.5% in the quarter, driven by strong food sales, but sales were down 4.5% in Europe.

Typically, ice cream brands aren't as popular for at-home consumption in Europe and are mostly sold in parks and tourist areas, according to WSJ.

What's Next: Unilever also said it will spin off the majority of its tea business and create a new standalone entity.

The company will hold on to its tea business in key markets like India and Indonesia, as well as its ice tea joint venture with beverage giant PepsiCo, Inc. (NYSE:PEP).

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Photo by Arild Vågen via Wikimedia.

Posted In: PEP UN