Unilever’s first-quarter underlying sales growth beat expectations today, driven by a return to volume-led growth in emerging markets and strong demand for its “power brands”, including Dove and Vaseline, as it wins back customers.
The London-listed consumer goods giant, with a market valuation of more than US$120 billion, kept its 2026 sales and profit margin forecast unchanged, indicating the firm hopes to weather the impact of “heightened macroeconomic uncertainty”.
Consumer goods companies are navigating one of the most challenging cost environments in years due to surging commodity costs and supply chain disruptions from the Iran war.
“We have started the year well with volume-led growth driven by our Power Brands and a positive performance across all Business Groups,” CEO Fernando Fernandez said in a statement.
Fernandez is reshaping Unilever to focus on personal care and beauty after spinning off its ice cream business last year and announcing plans last month to hive off its food division and merge it with US spice maker McCormick.
Unilever’s sales growth in the quarter was driven by stronger-than-expected volumes even as pricing was softer than forecast, marking a shift back to volume-driven growth after years of relying on price increases.
The consumer major raised prices sharply during the Covid-19 pandemic and after Russia invaded Ukraine in 2022, passing commodity cost increases on to consumers, and has only recently started winning back customers by slowing the pace of increases and investing in marketing and innovation.
The British company posted underlying sales growth of 3.8% in the three months to March, ahead of the 3.6% growth expected by analysts in a company-compiled consensus.
The volume rise was led by so-called power brands, which are its biggest brands including Dove, Axe and Dermalogica, which grew underlying sales by 5%, with 4% volume growth.
Peers from Nestle to Procter & Gamble have warned of higher costs from the Iran war, with Reckitt flagging margin pressure, though French rival L’Oreal beat expectations as shoppers bought more premium products.
Firms are also grappling with the possibility of softening demand as household budgets could get squeezed if oil prices remain elevated and the conflict drags on.
