Key Highlights
- First-quarter underlying sales growth reached 3.8% for Unilever, surpassing the consensus estimate of 3.6%
- Quarterly volume expansion of 2.9% significantly exceeded the projected 1.8%
- The company’s Power Brands delivered 5.0% underlying sales growth alongside 4.0% volume increases
- Underlying sales in emerging markets climbed 5.7%, with notable strength in India and across Latin America
- Management maintains full-year outlook: sales growth projected at the lower end of the 4%–6% target range
Unilever delivered first-quarter underlying sales expansion of 3.8%, outpacing the 3.6% consensus forecast from Wall Street analysts. The company’s volume growth registered at 2.9%, substantially above the 1.8% projection.
The primary catalyst behind these results was the performance of the company’s Power Brands portfolio. This segment achieved underlying sales growth of 5.0% while volume expanded 4.0% during the three-month period.
All business divisions recorded positive volume momentum. The Home Care segment emerged as a particularly strong performer, driven by accelerating consumer demand throughout major emerging market territories.
The emerging markets segment overall registered underlying sales expansion of 5.7%. India turned in robust results, while Latin America demonstrated a recovery following what management characterized as “decisive actions” implemented across the region.
Chief Executive Fernando Fernandez emphasized that the company kicked off the year with “volume-led growth” and highlighted “broad-based momentum” throughout its emerging markets operations.
Despite prevailing macroeconomic headwinds, Fernandez expressed confidence in the company’s ability to meet its full-year targets. Since assuming leadership last year, Fernandez has spearheaded an extensive business transformation.
This transformation initiative has encompassed senior leadership changes and reductions in administrative personnel across the organization.
Historic Portfolio Transformation Underway
Approximately one month ago, the company announced an agreement with McCormick to merge their respective food operations into a newly formed entity with an enterprise value of roughly $65 billion.
The cash-and-stock transaction would grant Unilever shareholders a 65% ownership stake in the combined business. However, the transaction has faced skepticism from certain European investors concerned about exposure to debt-laden U.S. food assets.
This McCormick transaction aligns with Unilever’s strategic pivot toward beauty, personal care, and home products — systematically reducing food-related holdings.
In recent years, the company has separated its ice-cream division into Magnum Ice Cream, exited the tea category, and offloaded its margarine and spreads portfolio.
Magnum Ice Cream, whose brands include Ben & Jerry’s, posted first-quarter organic sales growth of 4.5%, exceeding the 2.6% analyst projection. Quarterly revenue totaled €1.77 billion.
Home Care and Latin America Stand Out
Analysts at RBC Capital Markets highlighted that Home Care and Latin America delivered the strongest organic sales performance in the first quarter — advancing 6.1% and 6.2% year-over-year, respectively.
The Home Care division’s expansion was purely volume-based. In Latin America, both volume increases and pricing contributed to the organic growth figure.
“Unilever’s actions to restore its performance in these areas bore fruit,” wrote RBC analysts James Edwardes Jones and Wassachon Udomsilpa.
Quarterly turnover declined to €12.6 billion, down 3.3% year-over-year, broadly in line with market expectations.
Management reiterated its full-year guidance. The company anticipates underlying sales growth at the lower bound of its 4%–6% multi-year target corridor, with a minimum of 2% underlying volume growth, and a slight operating margin improvement compared to the 20.0% achieved in 2025.
Unilever also confirmed that its €1.5 billion share repurchase program — unveiled in February — commences today and is scheduled to conclude by July 6.
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