The consumer goods company posted 3.8% underlying sales growth, ahead of analyst expectations, led by strong volumes in emerging markets
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Unilever posted underlying sales growth of 3.8% in the first quarter of 2026, topping analyst expectations, as home care and beauty brands drove volume gains across emerging markets. A company-compiled consensus cited by RTÉ had pegged analyst expectations at 3.6%.
Volume growth of 2.9% outpaced price growth of 0.9% for the quarter, with total turnover of €12.6 billion, down 3.3% from the prior year due to a currency headwind of 7.7%, the company said.
Home Care was the top-performing segment, with underlying sales growth of 6.1% — almost entirely volume-driven at 6.2% — led by strong results in India and Brazil. Beauty & Wellbeing grew 3.6%, with double-digit volume gains in Dove and Vaseline. Personal Care grew 3.7%, driven by deodorants and skin cleansing, while Foods was the slowest-growing segment at 2.2%.
Emerging markets contributed the bulk of growth, with underlying sales up 5.7% and volume up 4.2%. India grew 7%, driven by 6% underlying volume growth. Latin America grew 6.2%, returning to volume growth at 2.6%. Europe declined 0.9%, with volumes down 1.2%, reflecting soft market conditions.
Underlying sales for the Power Brands portfolio — Dove, Axe, Dermalogica, and other flagship labels — rose 5.0%, with volumes up 4.0%.
Unilever kept its full-year 2026 outlook unchanged, projecting underlying sales growth at the bottom end of its 4% to 6% multiyear guidance range, with at least 2% underlying volume growth and a modest improvement in underlying operating margin from 20.0% in 2025.
The company also flagged rising cost pressures. According to Reuters, CFO Srinivas Phatak told analysts that logistics and factory pressures tied to the Iran war have pushed the company's anticipated full-year cost inflation to between €750 million and €900 million — a figure he said runs €350 million to €500 million beyond what the company had forecast at the start of the year. Phatak described the pricing approach as frequent but incremental, adding that the steepest hikes would be concentrated in Asia, Africa, and Latin America — the regions where inflationary pressure has been most acute — and would take effect largely after mid-year.
Unilever's productivity program, launched in 2024 and targeting €800 million in savings by end of 2026, had delivered €750 million by the end of the first quarter, running ahead of schedule.
Since taking the helm, Fernandez has oriented the company's strategy toward personal care and beauty. The company agreed in March to combine its Foods business with McCormick in a deal implying an enterprise value of about $44.8 billion for the Unilever unit — its biggest portfolio move in decades. Completion is targeted for mid-2027; the McCormick agreement comes roughly a year after Unilever separated its ice cream operations into a standalone business.
"We have started the year well with volume-led growth driven by our Power Brands and a positive performance across all Business Groups," Fernandez said in a statement. "Despite heightened macroeconomic uncertainty, the progress we are making to elevate our brands through Desire at Scale and improve operational execution means we remain confident of delivering on our guidance for the year ahead."
Unilever also declared a quarterly dividend of €0.4664 per ordinary share, up 3.0% from the first quarter of 2025, and launched a €1.5 billion share buyback program expected to complete by July 6, 2026.
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