Shares of Unilever (LON:ULVR) (UL) rose more than 5% in London trading after the company delivered a strong Q1 report, surpassing sales expectations as it successfully attracted customers who had previously shifted to less expensive brands amid rising global inflation.
The consumer goods titan achieved a 4.4% rise in underlying sales growth, exceeding the 3% growth anticipated by analysts in a company-conducted poll.
This marked the second consecutive quarter of volume growth, with sales volumes up 2.2% following previous declines. Prices also increased by 2.2%.
Much of the sales growth was driven by the company’s Beauty and Wellness segment, which saw growth of 7.4%, compared to consensus estimates of 6%.
Unilever’s total turnover for the quarter grew by 1.4% to €15.0 billion.
Commenting on the report, analysts said:
“Q1 OSG beat comes with a high quality in our view, with better volumes than expected supported by Beauty (positive margin mix implications) and home care, and with a volume beat spread across the three regions.”
“While we would expect only marginal EPS consensus upgrades on the back of an unchanged guidance, we see today as a re-rating event and think this opens a favourable catalyst path with SBB, H1 gross margin upside (especially relative to Food peers), and then H2 OSG acceleration,” they added.