Unilever raises guidance but is downbeat on Europe, China consumer sentiment

Unilever connected Thursday gave a dire appraisal of user sentiment successful Europe and China, 2 of its cardinal markets, but raised its afloat twelvemonth income forecast arsenic it lifted prices to antagonistic soaring costs.

Like the remainder of the user goods industry, Unilever's margins person been squeezed since the commencement of the warfare successful Ukraine that has pushed up costs of vigor and cardinal ingredients. As a result, the institution has raised prices sharply.

"We are amazed however good volumes person held up [given] the levels of terms increases we've been forced to take," CEO Alan Jope told CNBC aft the results were published. "It's testament to the spot of our brands and our execution."

Shoppers astir the satellite paid 12.5% much for Unilever products successful the 4th - a grounds terms hike for the institution - with income volumes declining 1.6%. The institution reported a better-than-expected summation successful third-quarter sales.

Shares roseate astir 1% successful greeting trade.

"Consumer sentiment successful Europe is astatine an each clip low," Chief Financial Officer Graeme Pitkethly told reporters, informing of fears of a "confluence of events" successful Europe with vigor prices and ostentation rising and consumers' savings waning.

"Both the premium segments of the marketplace and the worth segments of the marketplace are really increasing rather quickly, astatine an equivalent rate," Pitkethly told journalists.

But ostentation and the committedness of austerity successful immoderate countries has prompted a cost-of-living situation that is pushing immoderate radical towards cheaper alternate products, specified arsenic backstage statement goods made by retailers.

"The basal needs of our European consumers are occupying a higher stock of wallets - things similar utilities, proscription and nutrient - and determination tends to beryllium chopped backmost connected discretionary non-food items."

Unilever makes much than 400 brands ranging from Persil detergent to Ben & Jerry's crystal cream.

In China, Unilever's 3rd biggest marketplace that has been doubling down on Covid-19 lockdowns, income grew by 1%.

"The China number, 1%, was successful information a competitory show successful a Chinese marketplace that is inactive rather subdued by continued lockdowns successful China," Pitkethly said, adding that assurance successful China is little comparative to humanities norms and that Unilever was not arsenic capable to summation prices successful the country.

Unilever said it present expects underlying income maturation for the afloat twelvemonth 2022 to beryllium supra 8%. In July, the institution said it expected to bushed its erstwhile forecast of 4.5% to 6.5%.

"As we've been seeing with different names successful the wider industry, raising prices and keeping volumes ticking higher is opening to go a mammoth challenge," Matt Britzman, equity expert astatine Hargreaves Lansdown, said. "The 1.6% driblet successful volumes implicit Q3 isn't each that bad."

— CNBC's Hannah Ward-Glenton contributed to this report