LONDON, United Kingdom, April 27 – Unilever on Thursday reported higher revenue in the first quarter as high inflation pushed the British consumer goods giant to hike prices.
The maker of products ranging from Magnum ice cream and Cif surface cleaner to Dove soap, said revenue increased seven percent to 14.8 billion euros ($16.4 billion) compared with the first three months of 2022.
Unilever, like companies worldwide, is passing on higher costs to customers as inflation stays stubbornly elevated.
Rising revenue in the first quarter was “driven by price growth in response to continued high input cost inflation and an improved volume performance”, outgoing chief executive Alan Jope said in the earnings statement.
“We remain focused on navigating through continued macroeconomic uncertainty and are confident in our ability to deliver another year of strong growth, which remains our first priority.”
Unilever earlier this year announced that Hein Schumacher, head of Dutch dairy and nutrition firm Royal FrieslandCampina, would succeed Jope in July.
– ‘Inflation battle’ –
Separately Thursday, British supermarket group Sainsbury’s revealed falling annual profits as it took a hit from higher costs and sought to keep a lid on hiking prices for shoppers.
“We really get how tough life is for so many households right now, which is why we are absolutely determined to battle inflation for our customers,” chief executive Simon Roberts said alongside the earnings update.
Annual inflation in Britain remains stubbornly above 10 percent despite multiple interest rate rises from the Bank of England since late 2021.
“Big brand owners are testing the limits of how much they can put up prices before consumers stop buying their products,” AJ Bell investment director Russ Mould noted in reaction to Thursday’s results.
“Unilever has once again charged more for its products and there has been very little volume erosion which means its bold move has paid off. Whether this can continue is another matter.”
Mould said Sainsbury’s was “on the other side of the equation.
“It wants more customers to buy its own-label products as theoretically margins could be better than selling third-party branded items.”
In morning deals, Unilever’s share price won 1.5 percent and Sainsbury’s fell 0.7 percent.
Scotland-born Jope will depart Unilever after coming under fierce pressure from activist investors.
Jope oversaw Unilever’s failed $50-billion bid at the start of 2022 for the former healthcare unit of drugmaker GlaxoSmithKline.
In response, Jope slashed around 1,500 management jobs in a global restructure widely seen as a bid to appease unhappy investors.
He also offloaded its global tea business, including brands Lipton and PG Tips, and bought a majority stake in hair wellness company Nutrafol.
“We continue to shift our portfolio into higher growth spaces, with the delivery of another quarter of double-digit sales growth” in Unilever units Prestige Beauty and Health & Wellbeing, Jope added Thursday.
