Unilever beat first-quarter sales forecasts as the firm hiked prices by more than 8% to offset higher supply chain and energy costs, more than outweighing a dip in sales volumes.
The maker of Dove soap and Ben & Jerry's ice cream warned on Thursday it expected to raise prices further, increasing its forecast for cost inflation in the second half of the year to €2.7 billion due to "the outbreak of war in Ukraine and the related increase in raw material inflation."
It now expects full-year underlying sales growth to be towards the top end of its 4.5% to 6.5% guidance range, but the full-year underlying operating margin towards the bottom end of its 16% to 17% range.
'Improved Growth Momentum'
“The delivery of another solid quarter of sales growth builds on the improved growth momentum that we achieved in 2021 and is underpinned by Unilever’s increased focus on operational excellence as well as disciplined adherence to our chosen strategic priorities," commented chief executive Alan Jope.
"We are maintaining strong investment in our top brands, growing our 13 billion+ Euro brands by 8.8% in the quarter. E-commerce sales now represent 14% of turnover following another quarter of strong double-digit growth."
Consumer goods makers around the world have been raising prices to make up for soaring energy, commodities, labour and transportation costs, with the Ukraine conflict exacerbating inflationary pressures already building in the recovery from the COVID-19 pandemic.
Rivals Procter & Gamble and Nestlé have also reported strong sales growth in recent days after lifting prices, but some analysts are concerned consumers may increasingly switch to cheaper own-brand products as their incomes are squeezed.
First Quarter Sales
Unilever's first-quarter underlying sales rose 7.3%, beating analysts' average forecast of 4.4% in a company-supplied poll.
Prices rose 8.3%, while volumes fell 1%. Analysts had expected a 6.3% rise in prices and a 1.7% decline in volumes.