Unilever raised its full-year sales forecast after delivering stronger-than-expected second-quarter growth, sending the company’s shares sharply higher in London.
The consumer goods group reported particularly strong demand across its Home Care, Beauty & Wellbeing and Personal Care divisions. Its quarterly volume growth was also the strongest recorded in more than a decade.
Unilever Shares Rise More Than 6%
Unilever shares climbed 6.3% to 4,920 pence following the results.
The stock outperformed the FTSE 100 and reached its highest level since March 6, as investors welcomed the company’s stronger sales performance and improved full-year guidance.
Sales Growth Beats Market Expectations
Unilever reported second-quarter underlying sales growth of 5.8%, comfortably exceeding the analyst consensus forecast of 4.3%.
Underlying volume growth reached 5.5%, marking the company’s strongest quarterly volume performance in more than 10 years.
Turnover increased by 3.8% to €13 billion, despite currency movements reducing reported growth by approximately 2.4%.
The strong volume figures suggest that Unilever’s performance was driven mainly by higher consumer demand rather than price increases alone.
Unilever Raises Full-Year Sales Outlook
Following the strong quarter, Unilever upgraded its expectations for the full year.
The company now forecasts underlying sales growth within its long-term target range of 4% to 6%. It had previously expected growth to come in near the lower end of that range.
Unilever also raised its underlying volume growth target to approximately 3%, compared with its earlier forecast of at least 2%.
Management continues to expect a modest improvement in the company’s underlying operating margin.
Second-Half Growth Expected to Reach 4% to 5%
Unilever forecasts underlying sales growth of between 4% and 5% during the second half of the year.
Unlike the first half, the company expects pricing to become a more important contributor to future sales growth.
Unilever also anticipates a modest improvement in its full-year underlying operating margin from the 20% recorded in 2025.
However, commodity inflation could continue to place pressure on production costs and gross margins.
Power Brands Lead Unilever’s Performance
Unilever’s Power Brands remained the main driver of growth.
These major brands account for approximately 78% of the company’s total turnover and generated underlying sales growth of 6% during the first half.
The performance highlights the importance of Unilever’s largest brands, which include products across personal care, beauty, food and household cleaning categories.
Home Care Delivers Strongest Growth
Home Care was Unilever’s best-performing business division during the second quarter, recording underlying sales growth of 9.1%.
Beauty & Wellbeing followed with growth of 8.1%, while Personal Care sales increased by 5.9%.
These divisions helped offset a much weaker performance from the company’s Foods business.
Foods Division Struggles With Competition
Unilever’s Foods division recorded underlying sales growth of only 0.2%.
The business was affected by softer demand in developed markets and stronger competition within the U.S. condiments sector.
Unilever said the planned combination of its Foods operation with McCormick remained on schedule. The transaction is expected to be completed by mid-2027 at the latest.
Morgan Stanley Calls Results a Clear Beat and Raise
Morgan Stanley described Unilever’s update as a clear “beat and raise,” referring to the company exceeding market forecasts before upgrading its guidance.
The bank highlighted that the reported 5.8% underlying sales increase was significantly stronger than the 4.3% consensus estimate.
Unilever’s 5.5% volume growth was also more than double analysts’ expectations.
Morgan Stanley said the strong volume performance could lead analysts to modestly increase their earnings forecasts. However, it warned that commodity inflation continued to pressure Unilever’s gross margin.
Strong Volumes Support Unilever’s Outlook
Unilever’s latest results showed broad-based momentum across several of its most important business divisions.
The combination of higher volumes, stronger Power Brand sales and improved full-year guidance helped push the company’s shares to their highest level since early March.
However, investors will continue to monitor commodity costs, pricing trends and the weak performance of the Foods division during the remainder of the year.
