Unilever sales volumes grew at their fastest pace in more than a decade during the second quarter, prompting the consumer goods giant to raise its annual sales forecast on Tuesday, according to a report by Reuters. Consumers continued reaching for brands including Vaseline, Dove and Cif despite household budget concerns stemming from the Iran war, the report said.
Unilever’s shares, which had slid 16% since the conflict began, rose as much as 6.8% to £49.43 in early morning trading following the results, Reuters reported. The shares were up 5.8% at £48.96 by 0745 GMT, putting the stock on track for its best day in two years if the gains held.
Second-quarter turnover increased 3.8% to €13 billion, with underlying sales volumes growth of 5.8% for the quarter ended June 30 — well above analysts’ average expectation of 4.3%, according to a company-compiled consensus cited by Reuters. Second-quarter volumes rose by 5.5%, powered by strength in key markets including India, Indonesia and Latin America. The report was published from London, with Reuters noting an exchange rate of $1 to 0.8798 euros at the time of publication.
Unilever sales growth for 2026 is now expected to be within its multi-year forecast range of 4%-6%, an upgrade from its earlier forecast of growth at the bottom end of that range, according to the report. The company forecast sales growth of 4%-5% in the second half of the year, driven by higher pricing.
The British company has been shifting toward beauty and well-being brands under CEO Fernando Fernandez, who was appointed last year to accelerate its turnaround strategy, Reuters reported. Unilever is in the process of spinning off its slow-growth foods business into a $65 billion entity with U.S. spice maker McCormick, with the separation expected to be completed no later than mid-2027.
Tuesday’s results underscored the company’s motivation to sell the foods unit, with sales volumes for that business falling 0.1% even as each of Unilever’s other three businesses posted growth of over 5%, according to the report.
Bernstein analyst Callum Elliott said the stronger-than-expected results “seem likely to drive a significant uptick in positivity today and perhaps even induce investors to look beyond the noise of the ongoing foods sale process,” Reuters reported.
Like its industry peers, Unilever had ceded market share to private label brands owned by retailers during the Covid-19 pandemic, which drove industry sales volumes to record lows, according to the report. A subsequent supply chain crunch and surge in raw material prices, prompted by Russia’s invasion of Ukraine, had further hurt the company’s ability to spend on marketing and brand development, eroding sales volumes further.
In recent years, however, Unilever has invested heavily in marketing, spending 16.1% of its overall turnover on marketing in the second quarter, with a focus on its key “power” brands such as Axe, Cif and Vaseline, including a notable branding push at the FIFA World Cup, Reuters reported. “The days of underinvesting in our businesses are over,” Unilever Chief Financial Officer Srinivas Phatak said on an investor call.
Barclays analyst Warren Ackerman said the results were “further evidence that Unilever’s home and personal care portfolio can deliver growth well above many global staples peers,” adding that he expects Unilever to deliver the best growth after L’Oreal following completion of the McCormick deal.
Unilever said the separation of its foods business was progressing well. “We’re on course to getting this merger finalised,” Phatak said, according to Reuters. While the Middle East conflict has burdened companies with higher costs this year, Unilever has softened the impact by raising prices, the report said.
Unilever’s stronger-than-expected performance adds to a broader pattern of major consumer and retail companies posting robust growth this year, a trend also seen in Amazon’s business sales crossing $60 billion.
I am Rukaiya Kadiwala, an experienced News Content Writer with 6+ years of expertise in hospitality, travel, hotel, restaurant, business, and lifestyle news. Skilled in writing, research, fact-checking, headline creation, and digital publishing, I create accurate, engaging, and high-quality content that informs and attracts readers worldwide.
