Unilever sales beat expectations amid sustained price rises

Unilever surpassed turnover growth forecasts in the first quarter as price hikes compensated for added inflationary pressures.

The Ben & Jerry’s and Magnum ice cream brands owner revealed underlying sales increased by 10.5 per cent in the opening three months of the year, compared to analysts’ expectations of 7.2 per cent.

Flatlining volumes were offset by price rises of 10.7 per cent the business made over course of the last year. 

Despite the cost-of-living crisis affecting much of its key markets, Unilever told investors that trading benefited from solid performances across all five main divisions.

Turnover grew the most in its beauty and wellbeing arm following a spike in trade across Europe and the Americas, with higher demand for hair care products, Vaseline and Pond’s skincare brands.

Trading was further lifted by sales of the FTSE 100 company’s ‘billion-plus euro brands,’ especially Hellman’s, Lux soap and Rexona deodorant.

Mark Crouch, an analyst at eToro, said: ‘Unilever is one of those firms that isn’t going to set the world alight with whizzy tech, but it does have very dependable household staple brands. 

‘When inflation catches light, like it has in the past year, consumers tend to stick with products they know even as the company hikes prices to sustain its margins.’ 

Overall revenue expanded by a more modest 7 per cent to €14.8billion (£13.1billion), which the firm said reflected adverse currency fluctuations and the sale of tea business Ekaterra to CVC Capital Partners. 

But Unilever now expects underlying sales gains for 2023 to be towards the top end of its current 3 to 5 per cent forecast, supported by price rises, improved volumes and moderating cost inflation in the latter half of the year.

Chief executive Alan Jope said: ‘We remain focused on navigating through continued macroeconomic uncertainty and are confident in our ability to deliver another year of strong growth, which remains our first priority.’

The Scottish-born boss, 60, intends to depart at the end of this year following heavy criticism from investors over its meagre sales performance relative to other peers and Unilever’s failed £50billion bid for GSK’s consumer healthcare division. 

He will be replaced by Hein Schumacher, the head of dairy and nutrition products supplier Royal FrieslandCampina, who began his career as a finance manager at Unilever.

Since Jope took over in 2019, Unilever shares have been treading water after more than doubling under his predecessor Paul Polman. They were up 1.45 per cent up at £44.35 on Thursday morning.