Key Highlights from Unilever's Q3 Earnings

Unilever PLC (NYSE: UL) reported a 4.4% underlying sales growth in the third quarter of 2020 on Wednesday. Sales grew 5.3% year-over-year in the emerging markets and 3.1% YoY in developed markets.

The FMCG company also announced a €0.4104 quarterly dividend to shareholders, payable in November.

Key Highlights for Q3 2020: Unilever reported €12.9 billion in quarterly revenue, 2.4% lower YoY. The cumulative revenues for the first three quarters of 2020 decreased by 1.8% YoY to €38.6 billion.

Online sales surged 76% during the quarter. Food for home consumption and hygiene products recorded heightened growth levels. Other segments like food services, skincare, and deodorants recorded an overall YoY decline but improved sequentially.

Home Care segment's underlying sales volume grew 8.5% but had a negative pricing impact of -1.6%.

During the quarter, the company launched two new products in China, Domestos and Comfort fragrance boosters.

The fabric solution product, Omo laundry liquid was a key sales driver in the Latin American markets.

Underlying sales from Food and Refreshments products gained 3.7% with equal growth of 1.8% in volume and price. Due to lockdown restrictions, many of the food services channels remained closed, leading to a 20% drop in sales.

Beauty Care and Personal Care products volume grew by 3.5% and price showed a marginal growth of 0.4%. 

Analyst estimates: Based on data collected between Sept 21 and Oct 2, analysts estimate Q4 turnover of approximately €12.1 billion at a 2.2% underlying sales growth. Full-year 2020 and 2021 sales forecast is pegged close to €50.57 billion and €51.5 billion respectively.

Analysts anticipate the full year 2020 operating margin of 19.1% and 2021 operating margin of 19.3%.

Underlying EPS estimates of €2.49 for 2020, and €2.59 for 2021.

Price Action: UL shares closed 0.02% lower to $61.58 Wednesday.

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