Unilever reported a seven per cent rise in first-quarter profits today but said it was disappointed by a 1.3 per cent rise in sales of its 400 top brands and was taking action.
Unilever, whose brands include Knorr and Hellmann's in food and personal care top-sellers Dove, Lux and Sunsilk, posted first-quarter net profit before exceptional items and amortisation (BEIA) of euro851 million largely in line with analysts forecasts of euro687-926 million.
In February, Unilever abandoned its five-year target of five to six per cent sales growth from its 400 leading brands by 2004 to focus more on improving shareholder value through a greater focus on share buybacks and dividend rises.
For 2004, Unilever has said it expects improved growth of its top brands above 2003's 2.5 per cent, operating margins over 16 per cent and low double-digit per centage earnings growth.
Unilever has battled throughout 2003 to reverse stagnating sales and gave two warning of lower sales growth during the year due to low-growth frozen food, Slimfast slimmer's aids hit by the popularity of the low-carbohydrate Atkins diet and poor sales from prestige perfumes likes Calvin Klein.
Unilever first-quarter sales lag its two big European food rivals with Swiss-based world number one Nestle earlier this month reporting underlying sales growth of 5.1 per cent and France's Danone sales up 5.7 per cent.
Unilever Plc stock has underperformed the FTSE 100 index by just over 20 per cent over the last year and the DJ Stoxx Food & Beverages index by just under 20 per cent after the two sales warnings during 2003.