Unilever (UL) Stock Climbs as Q1 Results Surpass Expectations on Strong Volume Growth

Key Highlights

• First-quarter underlying sales growth reached 3.8%, surpassing the consensus estimate of 3.6%
• Volume expansion hit 2.9%, significantly exceeding the projected 1.8%
• Power Brands portfolio delivered 5.0% underlying sales growth alongside 4.0% volume increases
• Emerging market territories achieved 5.7% underlying sales expansion, with notable strength in India and Latin American regions
• Full-year outlook remains steady: sales growth projected at the lower boundary of the 4%–6% target range

The consumer goods giant delivered first-quarter underlying sales expansion of 3.8%, surpassing Wall Street’s 3.6% projection. Volume growth reached 2.9%, substantially outperforming the 1.8% consensus estimate.

The Power Brands portfolio emerged as the primary growth catalyst. This segment achieved 5.0% underlying sales expansion while volume climbed 4.0% during the three-month period.

All business divisions reported positive volume momentum. The Home Care segment particularly stood out, propelled by accelerating consumer demand throughout critical emerging market regions.

Unilever PLC, UL

Emerging market territories collectively registered 5.7% underlying sales growth. India demonstrated particularly robust performance, while Latin American operations rebounded following what management characterized as “decisive measures” implemented across the region.

Chief Executive Fernando Fernandez highlighted that the company launched the year with “volume-led expansion” and emphasized “widespread momentum” throughout its emerging markets operations.

Despite ongoing macroeconomic headwinds, Fernandez expressed continued confidence in achieving full-year targets. The executive, who assumed leadership last year, has spearheaded an extensive business transformation.

This transformation initiative has encompassed senior leadership replacements and reductions in corporate workforce levels.

Major Portfolio Transformation Underway

Approximately one month ago, the company announced an agreement with spice manufacturer McCormick to merge their respective food operations into a newly formed entity valued at approximately $65 billion, including debt obligations.

The transaction structure involves cash and stock, with Unilever shareholders receiving a 65% ownership stake in the combined enterprise. Some European institutional investors have expressed reservations about the deal, citing concerns over exposure to leveraged American food sector assets.

This McCormick transaction aligns with Unilever’s broader strategic pivot toward beauty, personal care, and household products — systematically reducing food business exposure.

In recent years, the company has separated its ice-cream division into Magnum Ice Cream, divested its tea operations, and sold off margarine and spreads brands.

Magnum Ice Cream, encompassing Ben & Jerry’s, posted Q1 organic sales growth of 4.5%, exceeding the 2.6% analyst projection. Quarterly revenue totaled €1.77 billion.

Home Care and Latin American Operations Outperform

RBC Capital Markets equity analysts highlighted Home Care and Latin American territories as the standout performers for organic sales expansion in Q1 — registering increases of 6.1% and 6.2% year-over-year, respectively.

Home Care’s advancement was entirely fueled by volume gains. Throughout Latin America, both volume increases and pricing contributed to the organic growth figure.

Quarterly turnover declined to €12.6 billion, representing a 3.3% year-over-year decrease, broadly aligned with market expectations.

Full-year guidance remains unmodified. The company anticipates underlying sales growth at the lower threshold of its 4%–6% multi-year range, with minimum 2% underlying volume expansion, and marginal operating margin improvement compared to the 20.0% achieved in 2025.

Management also confirmed its €1.5 billion share repurchase program — unveiled in February — commences today with an anticipated completion date of July 6.

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