LONDON — Skin care, prestige products and new acquisitions boosted underlying sales in Unilever’s beauty division 3.1 percent to 5.2 billion euros in the first quarter, the Anglo-Dutch consumer giant and parent of brands including Dove, Vaseline and Ponds said in a trading update Thursday.
Overall sales grew 3.1 percent to 12.4 billion euros on in the three months to March 31. On a reported basis, year-on-year sales dipped 1.6 percent due to Unilever’s disposal of its spreads business to KKR last July. Beauty was the largest division, by turnover, in the quarter, followed by foods and refreshment, and home care.
Alan Jope, chief executive officer, said the year was off to a “solid start,” and the company was on track to achieve its full-year expectations. He said growth was led by emerging markets and was balanced between volume and price.
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“Accelerating growth is our number-one priority. It requires both great execution and a continued strategic shift into faster growth segments and channels. We saw good performance in key growth channels, including e-commerce, and benefited from stronger global innovations, and faster and more relevant local innovation,” Jope said.
He added that the acquisitions made since 2015 collectively grew in the double-digits in the first quarter, and said that for the full year the company expects underlying sales growth to be “in the lower half” of its multi-year, 3 percent to 5 percent range. The company will also see an improvement in underlying operating margin, keeping it “on track for the 2020 target and another year of strong free cash flow,” he said.
Unilever said that in the January-to-March period, skin care and deodorants had a “good start,” while hair and skin cleansing grew modestly. Sales in oral care declined due to challenging market conditions.
Global brands, the company added, were helped by innovations including the launch of a new, patented anti-perspirant technology in the Rexona Clinical Protection range, while Dove foaming hand wash now has five times more moisturizers than the leading hand wash in North America.
The company added that Ponds and Sunsilk also grew well, while St. Ives facial mists and Love Beauty & Planet, a new, in-house brand that uses recycled plastic packaging, continued to build scale. Dollar Shave Club rolled out a new, full-service model designed to make it easier for subscribers to add a full range of grooming products to their monthly regime.
Prestige delivered another quarter of double-digit growth, Unilever said, while Schmidt’s and Quala also grew strongly, helped by their expansion into other personal-care categories.
As reported, Unilever has been rapidly snapping up small, prestige brands to fuel growth, and the strategy has been working. In fiscal 2018, underlying sales in beauty and personal care, grew 3.1 percent to 20.7 billion euros.
Prestige performed well in 2018, with double-digit growth at some of the consumer giant’s newest companies, including Hourglass, Ren, Living Proof and Kate Somerville, as well as improved momentum on Dermalogica and Murad. In March, the consumer giant confirmed plans to purchase Garancia, the French derma-cosmetic brand founded in 2004 by the pharmacist Savéria Coste.