Unilever (UL) shares rose more than 5% on the London stock market after the company reported a strong first-quarter performance, beating revenue forecasts as it attracted consumers who had previously turned to cheaper alternatives due to rising global inflation.
The consumer goods maker reported a 4.4% increase in underlying sales, beating the 3% increase expected by market experts in a survey conducted by the company.
This is the second consecutive quarter of growth in the quantity of goods sold, with a 2.2% increase in sales volume following previous declines. Product prices also increased by 2.2%.
A significant portion of the revenue increase came from the company’s Beauty and Personal Care division, which saw an increase of 7.4%, higher than forecast growth of 6%.
Unilever’s total revenue in the quarter increased by 1.4% to €15.0 billion.
Financial experts commented on the report stating that:
“The outperformance of first quarter organic sales growth is in our view at a high level, with stronger than expected volumes supported by Beauty and Personal Care (positive effects on the profit margin mix) and home care products , and with volume growth extending across all three geographic regions.”
“While we expect only minor adjustments to consensus earnings per share estimates based on the unchanged financial outlook, we view today as an opportunity to reevaluate the company’s market value and believe it paves the way for further developments favorable, including share repurchases, gross profit margin improvements in the first half (particularly compared to food sector peers) and then an acceleration of organic sales growth in the second half,” they further explained.
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