Shares in Ben & Jerry’s ice cream owner Unilever rose 3.11% on Thursday morning, as the consumer-goods giant beat first-quarter sales expectations.
The U.K.-listed stock, which also owns Lipton tea and Hellmann’s mayonnaise, said it has made a good start to the year, as underlying sales rose 5.7% in the three months to March. This was ahead of forecasts by analysts of 3.9%.
Consumers, who have often been locked down in their homes due to the COVID-19 pandemic, have been cooking more meals themselves because some restaurants have been shut.
Unilever, which owns Cup-a-Soup, Buavita and Knorr, noted strong demand for its in-home food in North America and Europe, while demand for most beauty and personal care categories has remained subdued.
Sales of its Lynx Sure and Dove antiperspirants fell, as consumers appeared to abandon personal hygiene while stuck at home.
The company said in a statement: “Deodorants declined high-single digit as the deodorants market was also impacted by lower consumer usage.”
Chief Executive Alan Jope warned the operating environment remains volatile in the regions Unilever operates.
“Fluctuating COVID-19 case levels and markets entering and exiting lockdowns continue to impact consumer behavior and channel dynamics,” he said. “Conditions in China are normalizing. Economic activity in India increased in the first quarter, although parts of the country have recently returned to lockdown as a result of sharply rising COVID-19 cases. Markets grew in Latin America in the first quarter, despite macroeconomic conditions remaining volatile, and market conditions in South East Asia remain challenging.”
The company will buy back up to €3 billion of shares from May.
James Edwardes Jones, an analyst at RBC Capital Markets, noted a “moderate sales beat relative to company compiled consensus,” which was consistent with what others in the sector have reported so far.
“The €3bn share buyback is a positive surprise in our view,” he said. “Guidance for slight margin growth in 2021 compares with consensus estimates of +30bps, so margin forecasts might have to come down a little.”