Last Tuesday, Unilever PLC (NYSE: UL) announced its intention to divest its ice cream business, a move that entails shedding 7,500 jobs as part of the company’s cost-saving initiative.
The consumer goods giant aims to finalize the spinoff by the conclusion of 2025, with indications from the CEO suggesting that the Netherlands stands as a favorable candidate for hosting the division’s listing.
Following the separation from the segment responsible for 16% of its global sales and contributing up to 40% of total sales in certain markets, Unilever pledges to achieve mid-single-digit underlying sales growth while concurrently enhancing its margins.
Upon assuming the CEO position last July, Hein Schumacher pledged to streamline operations to steer Unilever away from underperformance.
His predecessor faced criticism for overexpanding the portfolio, diverting management’s attention from core products. Recognizing the volatility of the ice cream business, which has long been a drag on Unilever’s performance, Schumacher opted to concentrate on 30 key brands responsible for 70% of sales.
In its recent fourth-quarter earnings report, Unilever’s figures revealed sluggish market share recovery and the imperative for further measures to rebuild it and enhance margins. Its competitor, the Procter & Gamble Company (NYSE: PG), reported mixed results in late January.
Although revenue received a boost from price increases, the latest quarterly update highlighted consumer reticence in purchasing P&G products. P&G revised its full-year adjusted earnings outlook downward, attributing it to restructuring initiatives and the write-off of Gillette.
Moreover, P&G noted a 2% decline in volume for its feminine, baby, and family care segment due to weakened demand, while the beauty segment struggled with flat volume. The healthcare division experienced a 3% volume drop owing to a delayed onset of the cold and flu season.
Unilever’s focal point remains on streamlining operations and fostering a performance-driven culture.
