Unilever Shares Surge Following Margin Guidance Increase and Ice Cream Spinoff Update

Unilever's shares experienced a notable increase on Thursday after the consumer goods giant raised its full-year margin guidance and confirmed that the spinoff of its ice cream business is on track for completion by the end of 2025. The company, known for its extensive brand portfolio including Dove, Axe, and Hellmann's, reported sales growth across all segments in its first-half results, with beauty and well-being leading at 7.1%. However, the ice cream segment, which accounts for 15% of total turnover, reported a modest 0.6% sales growth and a 1% decline in volumes, prompting Unilever to label its performance as "disappointing." In March, Unilever announced plans to separate its ice cream unit, which includes popular brands like Ben & Jerry's and Magnum, as part of a strategy to streamline operations across its beauty, personal care, home care, and nutrition sectors. CEO Hein Schumacher noted that while there was good volume growth, pricing remained subdued due to lower inflation in commodity costs compared to previous years. He emphasized the company's commitment to competitiveness and passing savings back to consumers. The company had previously raised prices across its product categories in response to significant input cost pressures over the last three years. Underlying price growth for the second quarter was reported at 1%, a significant drop from 8.2% during the same period in 2023. Analysts at Jefferies highlighted that Unilever's strong gross margin performance and revised margin guidance of at least 18% for the full year overshadowed these pricing challenges.