Unilever, the maker of Marmite, Magnums and Ben & Jerry’s ice cream, has announced that it has beaten its quarterly sales forecasts as rises in prices triggered only a small dip in volumes.
The consumer goods company, which has UK sites in London, Surrey and Gloucestershire, and a research hub in its historic Wirral home at Port Sunlight, said on Thursday (April 27) that its 10.7% increase in prices was, however, not has high as in recent quarters, which indicates signs that inflationary pressures could ease and input costs declined.
Unilever reported a 10.5% rise in underlying first-quarter sales to €14.8bn ($16.4bn), beating analysts' average forecast for a 7.2% increase, according to a company-provided consensus. That included a 10.7% increase in prices and a 0.2% dip in volumes. Price growth was slower versus the previous two quarters, and down from a record 13.3% reported in February, while the decline in volumes improved from the 3.6% drop posted at that time.
Unilever chief executive Alan Jope said: "Unilever has had a good start to the year, delivering another quarter of strong top line growth. Underlying sales growth accelerated to 10.5%, driven by price growth in response to continued high input cost inflation and an improved volume performance.
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"We are continuing to execute well on our strategic priorities. Growth was broad-based across the five Business Groups, underpinned by strong performances from our €1bn brands. We have stepped up both the effectiveness of our innovation and the investment behind our brands. We continue to shift our portfolio into higher growth spaces, with the delivery of another quarter of double-digit sales growth in Prestige Beauty and Health & Wellbeing, and the announced sale of Suave in North America. Our new operating model is driving focused resource allocation, and is unlocking a culture of bolder, faster decision-making and disciplined execution.
"We remain focused on navigating through continued macroeconomic uncertainty and are confident in our ability to deliver another year of strong growth, which remains our first priority."
While finance chief Graeme Pitkethly told journalists that Unilever's individual businesses would ease price rises at different rates.
Mr Pitkethly said: "We think it (price hikes) will step down from there... it will start to taper off over the quarters.
"Beauty and wellbeing and personal care - they are seeing much lower inflation, hence the lower rates of pricing ... homecare is a bit of a mixed bag given the emerging market footprint and foreign exchange evaluations."
Unilever said that it expects underlying sales growth for the full year 2023 to be at least at the upper end of its multi-year range of 3 – 5%., and predicted underlying price growth will remain high in the first half and soften through the year.
Rivals P&G and Nestle have also recently reported stronger than expected quarterly sales, with price hikes offsetting lower volumes.
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