Unilever has beaten quarterly sales forecasts, sending its shares up nearly 2% in early trading.
The household goods giant said its underlying first-quarter sales were up by 10.5% to €14.8bn (£13.1bn), beating analysts’ average forecast of a 7.2% increase.
This included a 10.7% increase in prices, although price growth was slower than in the previous two quarters, adding to signs inflationary pressure might be easing.
Unilever, which makes a number of products including Marmite, Dove soap and Ben & Jerry’s ice cream, acknowledged the current environment is “volatile and high-cost” but said it expected another year of strong underlying sales growth.
Underlying operating margin in the first half of the year will be at least 16%, the company said, adding that it expects “a modest improvement” in this by the end of the year.
Chief Executive Alan Jope said: “We have stepped up both the effectiveness of our innovation and the investment behind our brands.
“We continue to shift our portfolio into higher growth spaces, with the delivery of another quarter of double-digit sales growth in prestige beauty and health and wellbeing, and the announced sale of Suave in North America.
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“Our new operating model is driving focused resource allocation, and is unlocking a culture of bolder, faster decision-making and disciplined execution.
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Consumer goods giant Unilever expects price growth throughout 2023
“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.”
Steve Clayton, head of equity funds at Hargreaves Lansdown, said: “This was a forecast-beating outcome from Unilever who are proving adept at navigating through the current challenging inflationary environment.
“Sales were strong, but there was also good news on costs where Unilever say that pressures are no worse than guided, and now expected to ease.
“Margins this year are seen as at least 16% and full year sales growth will be approaching 5% or more.
“The portfolio is showing its strengths with positive volumes growth, on top of price increases in areas like beauty and wellbeing, and personal care.
“The group’s longstanding strengths in emerging markets are now helping them too, and as the Chinese economy continues to recover this should become ever more apparent.
“If there is a weak spot in the numbers, it comes from Europe, where growth remains weaker than elsewhere. Volume slippage of 3% in Europe held reported growth back to 9.2%. Hardly a disaster, but still evidence that the Unilever marketing machine is working better abroad than at home.”
