* Q1 underlying sales up 3.6 pct vs 3.3 pct analyst forecast
* Forex lowered sales by 8.9 pct
* Says overall markets are slowing, forex impact growing
* Reviews Ragu, SlimFast brands amid portfolio pruning
(Adds outlook, US portfolio review, share price, byline)
By Martinne Geller
LONDON, April 24 Unilever said
it may sell its underperforming Ragu pasta sauce and SlimFast
brands as it reported higher-than-expected first-quarter sales
on Thursday, led by strong sales in Northern Europe of personal
and household cleaning products.
The Anglo-Dutch maker of Ben & Jerry's ice cream, Dove soap
and Lipton tea announced a strategic review of its North
American pasta sauce business, which includes the market-leading
Ragu brand, and the troubled SlimFast brand whose sales have
tumbled in its biggest market, the United States.
Unilever bought SlimFast for about $2.4 billion in 2000,
when it was a leader in a burgeoning weight-loss market that has
since struggled amid a lack of innovation and an economic
downturn that also led Nestle to sell most of its
Jennie Craig business.
"It may lead to a disposal but it doesn't necessarily have
to," Chief Financial Officer Jean Marc Huet said. "We're looking
at all options."
The review follows the sale of Skippy peanut butter and
Wishbone salad dressings and marks the end of the reshaping of
the US portfolio, Huet said on a conference call. Unilever has
said it wants to focus more on higher-margin personal care
products in higher-growth markets of Asia and Latin America.
In the first quarter, underlying sales, which exclude the
impact of foreign exchange and acquisitions and disposals, rose
3.6 percent. That was down from growth of 4.1 percent in the
fourth quarter but analysts had on average forecast growth of
Sales in emerging markets rose 6.6 percent, slower than the
8.4 percent growth in the fourth quarter but still greater than
the overall market, which Huet said rose about 5 percent.
Unilever's shares were down 1.5 percent in London at 25.95
pounds, having dropped 6.9 percent over the last 12 months. Its
London and Amsterdam shares each trade at around 19 times
forward earnings, in line with peers such as Nestle, Danone
and Reckitt Benckiser Group.
Overall, Unilever's first-quarter revenue fell 6.3 percent
to 11.4 billion euros ($15.8 billion), due to an 8.9 percent hit
from exchange rates that was bigger than analysts had expected.
The stronger euro has hit revenue as two thirds of the company's
sales come from outside the eurozone.
At current spot rates, Unilever said foreign exchange should
reduce full-year sales by 5 to 6 percent this year, a slight
worsening from the 5 percent hit it forecast in January.
At the same time, it said sales growth for its markets
overall was slowing to somewhere above 2.5 percent. In January,
it said its markets were growing at around 3 percent. The
company did however repeat that it expects its own growth to
continue to outpace the broader markets.
($1 = 0.7231 Euros)
(Reporting by Martinne Geller; Editing by Elaine Hardcastle)