Tubs of Ben & Jerry’s ice cream in a store freezer in London, UK, on Thursday, April 25, 2024. Unilever Plc said it wanted to shed its ice cream division, which generates around 8 billion ($8.5 billion) in annual sales, in a bid to reverse years of lackluster performance.
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Unilever shares popped 6.8% on Thursday morning, after the consumer goods giant raised its full-year margin guidance and said the spinoff of its ice cream business was on track to complete by the end of 2025.
The British company, whose vast portfolio of brands spans Dove, Axe, Hellmann’s, Knorr, Domestos, Marmite and Vaseline, recorded sales growth across all segments in first-half results published on Thursday. Beauty and well-being expanded 7.1%, while ice cream lagged other segments with just 0.6% of growth.
Back in March, the company announced it would separate the ice cream unit, which includes Ben & Jerry’s and Magnum, in a bid to streamline its business across beauty and well-being, personal care, home care and nutrition.
Organic sales growth came in at 3.9% in the second quarter, missing expectations of a 4.2% expansion forecast by a company-compiled consensus.
Analysts at Jefferies said this would be overshadowed by the company’s beat on its gross margin for the period, along with an uplift in its margin guidance for “at least 18% for the full-year.” It had previously anticipated a “modest expansion” in operating margins across the period.
“This margin commitment will see consensus [earnings per share] move up c7-8% we think,” the analysts said.
This breaking news story is being updated.