Unilever's underlying sales growth beats hopes led by Emerging Markets

Unilever PLC on Thursday reported better-than-hoped underlying sales growth, despite a drop in overall revenue, with Emerging Markets and Power Brands performing well.

The London-based consumer goods firm, which owns brands such as Hellman’s mayonnaise, Knorr stock cubes and Colman’s mustard, reported total revenue of €12.56 billion in the first quarter, down 3.3% from €12.99 billion the year prior.

Underlying sales growth of 3.8% beat the 3.6% market consensus cited by JPMorgan, with volume growth of 2.9% and price growth of 0.9%.

‘We have started the year well with volume-led growth driven by our Power Brands and a positive performance across all business groups,’ said Chief Executive Fernando Fernandez.

Shares in Unilever rose 1.9% to 4,294.50 pence each in London on Thursday morning.

By division, Unilever said underlying sales grew 3.6% in Beauty & Wellbeing, 3.7% in Personal Care, 6.1% in Home Care and 2.2% in Foods.

Growth was broad-based across categories, with Power Brands leading performance with 5.0% underlying sales growth and 4.0% volume growth.

Emerging Markets saw 5.7% underlying sales growth, led by strong advances in India and a good recovery in Latin America.

Unilever left full-year guidance unchanged, forecasting underlying sales growth for 2026 to be at the bottom end of its multi-year guidance range of 4% to 6%, with at least 2% underlying volume growth for the full year.

In 2025, Unilever reported sales of €50.50 billion.

The firm anticipates a modest improvement in underlying operating margin for the full year versus 20.0% in 2025.

Commenting on the deal to combine its Foods business with McCormick & Co, Unilever said work is underway to support the delivery of forecast synergies.

Unilever expects to report stranded costs of €400 million to €500 million following the separation, which will be offset by savings from 2027 to 2029, while incurring one-off restructuring costs of €500 million over that period.

The deal is expected to close by mid-2027 ‘at the latest’ and follows the December 2025 demerger of Magnum Ice Cream Co.

‘We continue to move at speed to build a simpler, sharper Unilever with a structurally higher growth profile and a brand portfolio fit for the future,’ noted CEO Fernandez.

Unilever said its capital allocation priorities remain unchanged, with the €1.5 billion share buyback, announced in February, starting today.

The buyback, which will be run by Morgan Stanley & Co International PLC, is expected to be completed by July 6.

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