By Aimee Look

Unilever's underlying sales growth picked up slightly in the third quarter, aided by a recovery in China, as the U.K. consumer-goods giant readies a spinoff of its ice-cream division by the end of the year.

The company behind Dove soap and Ben & Jerry's ice cream is taking steps to sharpen its portfolio to focus on core brands at a time of changing consumer trends. The group aims to prioritize beauty-and-wellbeing and personal-care products, while stepping up investment in the U.S. and India, in a bid to anchor growth and revive its fortunes.

Unilever on Thursday reported underlying sales growth--a metric that strips out currency movements and the effect of acquisitions and disposals--of 3.9% for the third quarter. The figure beat consensus expectation of 3.7% compiled by the company, and was slightly ahead of the 3.8% growth rate Unilever reported for the second quarter.

Both prices and volumes, up 2.4% and 1.5% respectively, contributed to the company's underlying growth. It said it had particularly strong sales in developed markets and benefited from a return to growth in China and Indonesia, two markets that had been under pressure lately.

In North America, underlying sales grew 5.5%, mainly driven by volumes.

Unilever reported turnover of 14.72 billion euros ($17.09 billion), a 3.5% decrease on year mainly due to currency headwinds. Analysts had expected it to come in at 14.77 billion euros, according to the consensus.

The company reaffirmed its guidance for the full year, with underlying sales growth expected to be 3% to 5%. It said growth for the second half of the year would be ahead of the first. The company also said it anticipated its operating margin for the full year to grow, with margins for the second half of at least 18.5%.

Unilever is nearing completion of the spinoff of its ice-cream business, home to brands such as Magnum and Ben & Jerry's, into a new company called the Magnum Ice Cream Co. The spinoff was due to culminate in the listing of the business on Nov. 10, but Unilever said Tuesday that it would be delayed because of the U.S. government shutdown.

The company is betting a simplified lineup will help it reinvigorate top-line growth and help its brand stay relevant with consumers. The ice-cream spinoff will sharpen the company's focus, it added.

The broader consumer-staples industry has been battered as shoppers sought to rein in spending or swap to home brand products instead after years of steep price increases--spelling trouble for companies like Unilever, which owns hundreds of brands.

Executives at Nestle, maker of Nescafe coffee and Purina pet food, said last week that the company was taking action on some products for which it had priced consumers out. Coca-Cola this week said certain segments of the population were under pressure from factors including inflationary pressures and trade uncertainty. And brewer Heineken said trade uncertainty and weak consumer confidence hurt demand in the U.S and other markets last quarter.

Unilever in February unexpectedly promoted Fernando Fernandez, its former finance chief, to the top role in a bid to speed up its turnaround plans. Fernandez has since then said he aims to accelerate the effort by selling some food brands the company deems as underperforming and to shake up its leadership ranks.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

October 23, 2025 04:24 ET (08:24 GMT)

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