Unilever expects the first few months of 2025 to be slow, just like last year, as consumer spending continues to be under pressure.  

The London-headquartered company that makes Dove soap and Lipton tea reported full-year underlying sales growth of 4.2%, slightly lower than a company-compiled analyst consensus of 4.3%. The underlying operating margin was 18.3%, also below estimates of 18.4%.

“We anticipate a slower start to 2025 with subdued market growth in the near term. We expect the market and our growth to improve during the year as price increases, reflecting higher commodity costs in 2025,” Unilever’s CEO Hein Schumacher cautioned in the earnings report on Thursday.

The downbeat tone knocked Unilever’s shares by 7% as of 12 noon London time. 

“That guidance has spoilt the party and reminded investors that Unilever is still at the mercy of the global economy and consumers’ ability and willingness to splash the cash,” AJ Bell analyst Russ Mould pointed out. 

It has a few big changes on the horizon for 2025, including a triple listing for its ice cream unit, which makes Magnum and Ben & Jerry’s. The primary listing will be in Amsterdam’s Euronext, with secondary listings in London and New York. Unilever is also listed in the same markets. 

The move, announced last March, was geared at streamlining the business in a way that made more operational sense. 

The move is part of a larger effort under CEO Schumacher to restructure Unilever by prioritizing its strongest brands. Although the move didn’t excite investors much initially, it might still pay off.

Schumacher highlighted on Thursday that the company was “ahead of plan” in implementing the changes proposed in 2024, which are meant to generate €800 million in savings over three years.

“The new organization structure, with the business groups focusing on the top 24 markets and the 30 Power Brands–and that’s bringing simplicity and much sharper category focus,” Schumacher said in an earnings call.

Overall sales growth and a €1.5 billion share buyback point to a recovery in Unilever’s business, Mould said. But predicting what might happen if inflation rises, particularly in parts of Asia and Africa where a bulk of Unilever’s business comes from, is tricky. 

In contrast, Nestlé, Unilever’s consumer goods competitor, reported better-than-expected results on Thursday. Under new CEO Laurent Freixe, Nestlé plans to invest in the company’s top brands and deliver cost savings of CHF 2.5 billion ($2.75 billion) by the end of 2027. 

Nestlé is also doubling down on its high-potential brands and expects a narrower profit margin for the current year. 

A closer look at Unilever

Unilever’s so-called “power brands,” which include Vaseline cream, Cif cleaner, and Knorr soup, delivered over 75% of the company’s 2024 sales. 

In an effort to amplify its growth plan, the company also beefed up marketing investment to a record-high rate of 15.5% compared to 2023 levels.

Its beauty and wellness, food, and personal care segments delivered nearly the same turnover levels, over €13 billion each. Meanwhile, the ice cream arm raked in €8.3 billion, or 14% of Unilever's sales.

Britain-based Unilever expects full-year sales growth within the typical 3% to 5% range. While 2025 won’t be free of uncertainty, Schumacher said he was optimistic about the company’s direction.  

“Consistency is not about one good year. We know there is a lot still to do, and some way yet to travel - and in somewhat turbulent waters,” he said.

This story was originally featured on Fortune.com