Key Highlights
- Q1 underlying sales growth reached 3.8%, surpassing the analyst consensus of 3.6%
- Volume expansion achieved 2.9%, significantly exceeding the projected 1.8%
- Power Brands category delivered 5.0% underlying sales growth alongside 4.0% volume expansion
- Emerging markets segment achieved 5.7% underlying sales growth, with particularly strong results in India and Latin America
- Company maintains full-year outlook: sales growth projected at the lower end of the 4%–6% target range
The consumer goods giant delivered first-quarter underlying sales expansion of 3.8%, outperforming the analyst consensus of 3.6%. Volume expansion reached 2.9%, substantially exceeding the 1.8% projection.
The Power Brands portfolio served as the primary catalyst for these results. 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, supported by accelerating consumer demand throughout major emerging markets.
The emerging markets segment overall posted underlying sales growth of 5.7%. India demonstrated particularly robust performance, while Latin America showed renewed strength following what management described as “decisive actions” implemented across the region.
CEO Fernando Fernandez highlighted that the company began the year with “volume-led growth” and emphasized “broad-based momentum” throughout its emerging markets operations.
Despite ongoing macroeconomic uncertainty, Fernandez expressed confidence in achieving the company’s full-year targets. Since assuming leadership last year, Fernandez has guided an extensive organizational transformation.
This transformation has encompassed leadership changes at senior levels and reductions in corporate workforce.
Major Portfolio Transformation Underway
Approximately one month ago, the company finalized an agreement with McCormick to merge their food operations, creating a new entity valued at roughly $65 billion including debt.
The transaction structure provides Unilever shareholders with a 65% ownership stake in the combined business. Some European investors have expressed reservations about the deal, citing concerns regarding exposure to leveraged U.S. food sector assets.
This McCormick transaction aligns with Unilever’s strategic pivot toward beauty, personal care, and home care categories — while reducing food segment exposure.
Recent years have seen Unilever separate its ice-cream division into Magnum Ice Cream, divest its tea operations, and exit its margarine and spreads portfolio.
Magnum Ice Cream, which encompasses Ben & Jerry’s, posted Q1 organic sales growth of 4.5%, outperforming the 2.6% analyst projection. Quarterly revenue reached €1.77 billion.
Home Care and Latin America Deliver Standout Performance
RBC Capital Markets analysts highlighted Home Care and Latin America as the strongest performers for organic sales growth during Q1 — posting increases of 6.1% and 6.2% year-over-year, respectively.
Home Care’s expansion came entirely from volume gains. Latin America’s organic growth reflected contributions from both volume increases and pricing adjustments.
“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 matching market expectations.
The company maintained its full-year guidance. Management anticipates underlying sales growth at the lower end of its 4%–6% multi-year target range, with minimum 2% underlying volume growth, and a slight operating margin improvement compared to the 20.0% achieved in 2025.
Management also reaffirmed its €1.5 billion share repurchase program — initially announced in February — which commences today and should conclude by July 6.
