Unilever announced on Thursday its decision to increase prices in response to elevated costs influenced by the Iran conflict, while also revealing first-quarter sales growth that exceeded analyst predictions. The company, known for brands like Dove soap and Axe deodorant, maintained its 2026 sales and profit margin outlook, indicating confidence in navigating the current economic uncertainties.
The price adjustments will be targeted at specific markets and product categories, particularly those linked to crude oil, and are expected to take effect mainly in the latter part of the year, as outlined by finance chief Srinivas Phatak during an analyst briefing. Phatak specified that regions such as Asia, Africa, and Latin America, experiencing the bulk of inflation, will witness more significant price hikes compared to North America, where Unilever’s home-care sector is less prominent.
Acknowledging the challenging cost environment driven by surging commodity prices and supply chain disruptions due to geopolitical tensions, consumer goods companies are being compelled to increase prices to offset rising production expenses. Unilever anticipates a total cost inflation ranging from 750 million to 900 million euros for the full year, encompassing heightened logistics and manufacturing costs.
Emphasizing a strategic approach, Phatak mentioned that price adjustments would be gradual and competitive, with the possibility of further increases if inflationary pressures persist. Unilever last implemented a three percent price hike in late 2024, following the aftermath of the COVID-19 pandemic and the Ukraine conflict.
Industry experts, including Chris Beckett from investor Quilter Cheviot, highlighted the necessity for Unilever to balance price increments with maintaining sales momentum, particularly in constrained markets like Europe. A review of corporate statements since the onset of the conflict revealed that numerous companies, including Unilever’s competitors like Nestlé and Procter & Gamble, have signaled price rises due to the ongoing geopolitical tensions.
Unilever’s focus on its core brands such as Dove and Axe has contributed to robust first-quarter sales growth, with volume-driven performance surpassing expectations, especially in the beauty and home segments. CEO Fernando Fernandez expressed satisfaction with the company’s performance, attributing growth to its key brands and operational strategies. Fernandez, who assumed the CEO role after serving as the finance chief, is leading Unilever through a strategic transformation, concentrating on personal care and beauty lines following recent business divestments and restructuring efforts.
Unilever’s underlying sales growth of 3.8 percent in the first quarter outpaced analyst estimates, reflecting a positive start to the year and signaling a shift towards volume-oriented growth strategies after a period of reliance on price adjustments.