Prestige beauty strong for Unilever in Q1, new Elida unit performing well
Global home products giant Unilever said Thursday it delivered "strong growth” in its Prestige Beauty segment as all its divisions produced positive revenue gains in the first quarter.
Beauty & Personal Care’s underlying sales grew 2.3% to €5 billion in the opening quarter, with 1.5% from volume and 0.8% from pricing. Meanwhile, its Prestige Beauty business grew in strong double-digits, helped by the gradual restocking and reopening of bricks and mortar stores in the US, it noted.
Skincare and haircare both grew in mid-single-digits, while skin cleansing also grew in mid-single-digits, with growth in the first two months. That was followed by a decline in March as the company said it started “lapping a sharp increase in demand for hygiene products”.
In hair, wash & care growth was driven by strong performances in China and India, which was partly offset by a decline in styling, as restricted living continued to weigh on usage occasions, it said.
And it was even worse in the deodorants sector as a high-single-digit decline was, of course, also down to the market impacted by lower consumer usage due to lockdowns and the need for many to work from home.
There was also an update on the creation of its new unit, Elida Beauty, which now comprises a number of its smaller beauty and personal care brands such as Caress, Tigi, Timotei, Impulse and MonSavon, which collectively generated revenues of around €0.6 billion in 2020. It said the new segment is “making good progress”, benefiting from a dedicated management focus.
And as part of “driving the evolution of our portfolio”, the company also rolled out Dove brand's Care & Protect innovation across the Americas, Europe and India, with new technology bringing together “hygiene and long-lasting moisturisation across formats.
Along the same theme, Unilever also said its prestige Hourglass colour cosmetics brand had launched a 100% vegan red lipstick, formulated with a patent-pending pigment replacing the industry standard, produced from crushed beetles.
Overall, the opening quarter saw company-wide underlying sales up 5.7% to €12.3 billion, with 4.7% from volume and 1% from price. E-commerce continued to perform strongly, with underlying sales growth of 66%, now representing 11% of turnover.
CEO Alan Jope said in the trading statement: “We continued to focus on operational excellence, which is delivering improved competitiveness. In 2021, we expect to deliver underlying sales growth within our multi-year framework of 3-5%, with the first half at around the top of this range. We expect underlying operating margin to increase slightly in the full year, following a decline in the first half which is driven by a number of factors."
He added: “Covid-19 continues to cause additional supply chain costs and a negative margin mix. Commodity and freight costs have increased further and we will be lapping lower marketing spend in the first half of last year”.
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