Unilever’s New CEO Releases First Quarterly Report: China Performance Improves in Second Half; Major Changes for Ice Cream Starting in Q4

Today, Unilever reaffirmed its full-year 2025 financial guidance. The company expects its underlying sales growth for 2025 to fall within the range of 3% to 5%. “This reflects our strong innovation pipeline, solid momentum in developed markets, and decisive actions taken in Indonesia and China—both markets are expected to see performance improvement in the second half.” It also stated that underlying operating margin for the full year 2025 is expected to rise slightly, compared with 18.4% in 2024; margins for the first and second halves are expected to be more balanced than in 2024. Furthermore, the company anticipates the direct impact of tariffs on profitability to be “limited and manageable.” Meanwhile, the company noted that its productivity program is progressing ahead of schedule, delivering approximately €550 million (roughly RMB 4.5 billion) in savings by the end of 2025. Its ongoing €1.5 billion share buyback program is set to conclude in the first half of 2025. According to a letter sent today from global headquarters to Unilever China employees—and seen by Xiaoshidai—the company emphasized that although Q1 showed positive momentum, it remains aware of significant uncertainties surrounding the macroeconomic environment, exchange rate stability, and consumer sentiment, and will flexibly adjust plans as needed. Specifically, the letter outlined two current strategic priorities for advancing the company’s transformation: “First, generating scalable purchase desire across our brands—particularly by building new modes of reach and persuasion, leveraging ‘social media reviews’ to reinforce our word-of-mouth reputation. Second, cultivating a corporate culture where ‘performance is care,’ and relishing the joy of winning in the marketplace.” “Our leadership must embrace two organizational mindsets. First, a brand mindset—which I define as ‘desire at scale’; second, a people mindset—which I define as embedding a performance culture across the organization and rediscovering the joy of winning in the market.” Fernandez reiterated today during the earnings call. “Building large-scale brand appeal and delivering outstanding market execution are the twin pillars of our plan to transform Unilever into a consistently higher-performing company. We are making steady progress and remain confident in our ability to advance through 2025 and beyond.” Fernandez said. “Better Than Expected” Today’s report—the first since Unilever’s CEO transition—has drawn significant attention from international media. Xiaoshidai observed that Reuters reported Unilever’s Q1 underlying sales growth as “better than market expectations,” driven by price increases and robust demand for its premium products; the company also indicated the direct tariff impact remains limited. Despite global macroeconomic uncertainty, Unilever expressed full confidence in its full-year plan. Bloomberg noted that, like its peers, Unilever has been hit by rising costs—and still faces the challenge of persuading cash-strapped consumers to accept price hikes. The company has also had to contend with sluggish consumer demand in the U.S.—its key market—as well as tariff-related uncertainty. Yet last quarter, Unilever’s sales in North America rose 6.2%, supported by volume growth in its health and premium personal care brands.

Are Tariff Impacts Negligible? European Companies Are Thriving in the U.S. Market—and May Achieve Double-Digit Profit Growth Next Year

European companies are demonstrating remarkable adaptability—proving that U.S. tariff barriers may not be insurmountable obstacles. A Goldman Sachs–compiled investment portfolio comprising European stocks most exposed to tariffs outperformed the broader market significantly in October. As earnings season unfolds, this portfolio rose approximately 6%—twice the gain of the STOXX Europe 600 Index. From Hermès and Unilever to Galderma Group AG, numerous European giants have attributed their better-than-expected results and upgraded guidance to strong demand in the U.S. market. Consensus market expectations indicate that earnings per share (EPS) for STOXX 600 constituents are projected to grow 12% next year. A report released last Friday by Barclays similarly noted that EU-based firms are optimistic about their outlook and confident in efficiency gains driven by artificial intelligence. Strong Earnings, with the U.S. Market as the Growth Engine During the recently concluded third-quarter earnings season, the U.S. market has emerged as a critical engine of countercyclical growth for many European companies—several of which not only weathered headwinds but delivered impressive results. Luxury giant Hermès posted a 14.1% surge in sales across regional markets including the U.S. Consumer goods company Unilever likewise credited its better-than-expected sales to robust demand in North America. The company—owner of brands such as Hellmann’s mayonnaise and Dove soap—has absorbed cost pressures through internal efficiencies rather than passing them fully onto consumers, thereby preventing shoppers from switching to cheaper alternatives. CEO Fernando Fernandez stated, “We continue to achieve significant volume growth in the U.S.” Swiss skincare leader Galderma directly cited strong U.S. sales as the reason for raising its full-year guidance. Growth stories span multiple sectors. UK-based Haleon Plc reported unexpectedly strong sales growth in North America, driven by high demand for its Sensodyne toothpaste and Tums antacids. Automaker Stellantis reported a 13% jump in Q3 net income, fueled by the recovery of its North American operations. Even in luxury—previously suffering weak demand—LVMH and Kering (parent company of Gucci) both reported growth in North America, suggesting the downturn in high-end goods demand may be nearing an end.

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