Key Highlights
- First-quarter underlying sales expansion reached 3.8%, surpassing the 3.6% consensus estimate
- Volume expansion of 2.9% significantly exceeded the 1.8% analyst projection
- Power Brands portfolio delivered 5.0% underlying sales growth alongside 4.0% volume increases
- Emerging markets underlying sales climbed 5.7%, driven by robust results in India and Latin America
- Full-year outlook maintained: sales growth expected at lower end of the 4%–6% target range
Unilever delivered first-quarter underlying sales expansion of 3.8%, topping the 3.6% consensus projection from market analysts. Volume expansion of 2.9% similarly exceeded expectations, which had been set at 1.8%.
The Power Brands portfolio emerged as the primary catalyst for growth. This segment achieved underlying sales expansion of 5.0% alongside volume gains of 4.0% during the three-month period.
Positive volume momentum was recorded across all business divisions. Home Care particularly stood out, benefiting from accelerating consumer demand throughout major emerging market territories.
Emerging markets collectively registered underlying sales growth of 5.7%. India posted particularly impressive results, while Latin America showed a notable recovery following what management described as “decisive actions” implemented across the region.
Chief Executive Fernando Fernandez highlighted that the company launched the year with “volume-led growth” and emphasized “broad-based momentum” throughout its emerging markets operations.
Despite ongoing macroeconomic headwinds, Fernandez expressed continued confidence in achieving full-year targets. The CEO, who assumed leadership last year, has been steering an extensive business transformation initiative.
This transformation effort has encompassed leadership changes at senior levels and reductions in corporate workforce.
Major Portfolio Transformation Underway
Approximately one month ago, the company announced an agreement with specialty foods company McCormick to merge their respective food operations into a newly formed entity valued at roughly $65 billion, including debt obligations.
The transaction structure gives Unilever shareholders a 65% ownership position in the combined business. Some European shareholders have expressed reservations about the deal, citing concerns over exposure to debt-heavy American food sector assets.
This McCormick transaction aligns with Unilever’s broader strategic pivot toward beauty, personal care, and household products — deliberately reducing its food business footprint.
In recent years, Unilever has separated its ice-cream division into Magnum Ice Cream, divested its tea operations, and sold off its margarine and spreads portfolio.
Magnum Ice Cream, whose brands include Ben & Jerry’s, posted Q1 organic sales growth of 4.5%, outperforming the 2.6% analyst forecast. Quarterly revenue reached €1.77 billion.
Home Care and Latin America Deliver Standout Performance
Analysts at RBC Capital Markets highlighted that Home Care and Latin America emerged as the strongest performers for organic sales growth during the first quarter — posting increases of 6.1% and 6.2% year-over-year, respectively.
The Home Care division’s growth came entirely from volume expansion. In Latin America, the organic growth figure reflected contributions from both volume increases and pricing gains.
“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, representing a 3.3% year-over-year decrease, broadly consistent with market expectations.
The full-year outlook remains unaltered. Management anticipates underlying sales growth at the lower end of its 4%–6% multi-year guidance range, with minimum underlying volume growth of 2%, and a slight operating margin improvement compared to the 20.0% achieved in 2025.
The company also reaffirmed its €1.5 billion share repurchase program — initially announced in February — which commences today and is scheduled for completion by July 6.
