Unilever has beaten quarterly sales forecasts, sending its shares up nearly 2% in early trading.

The household goods giant said its underlying first-quarter sales were up by 10.5% to €14.8bn (£13.1bn), beating analysts’ average forecast of a 7.2% increase.

This included a 10.7% increase in prices, although price growth was slower than in the previous two quarters, adding to signs inflationary pressure might be easing.

Unilever, which makes a number of products including Marmite, Dove soap and Ben & Jerry’s ice cream, acknowledged the current environment is “volatile and high-cost” but said it expected another year of strong underlying sales growth.

Underlying operating margin in the first half of the year will be at least 16%, the company said, adding that it expects “a modest improvement” in this by the end of the year.

Chief Executive Alan Jope said: “We have stepped up both the effectiveness of our innovation and the investment behind our brands.

“We continue to shift our portfolio into higher growth spaces, with the delivery of another quarter of double-digit sales growth in prestige beauty and health and wellbeing, and the announced sale of Suave in North America.

Sainsbury’s sees fall in pre-tax profit as it reveals how much spent to ‘keep prices low’ during cost of living crisis

Elon Musk statements about Tesla Autopilot could be ‘deepfakes’, lawyers claim

Cost of living latest: Positive updates on UK housing market; Britons turning away from Ben & Jerry’s and Magnum

“Our new operating model is driving focused resource allocation, and is unlocking a culture of bolder, faster decision-making and disciplined execution.

Please use Chrome browser for a more accessible video player

Read more:
Consumer goods giant Unilever expects price growth throughout 2023

“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.”

Steve Clayton, head of equity funds at Hargreaves Lansdown, said: “This was a forecast-beating outcome from Unilever who are proving adept at navigating through the current challenging inflationary environment.

“Sales were strong, but there was also good news on costs where Unilever say that pressures are no worse than guided, and now expected to ease.

“Margins this year are seen as at least 16% and full year sales growth will be approaching 5% or more.

“The portfolio is showing its strengths with positive volumes growth, on top of price increases in areas like beauty and wellbeing, and personal care.

“The group’s longstanding strengths in emerging markets are now helping them too, and as the Chinese economy continues to recover this should become ever more apparent.

“If there is a weak spot in the numbers, it comes from Europe, where growth remains weaker than elsewhere. Volume slippage of 3% in Europe held reported growth back to 9.2%. Hardly a disaster, but still evidence that the Unilever marketing machine is working better abroad than at home.”

Related posts:

Domino’s Pizza to roll out drive-thru service as it seeks truce with franchisees US buyout firm Platinum Equity plots RMD Kwikform bid Markets slide as Fed eyes stimulus ‘taper’ later this year Why John Lewis is now offering savings and investment services Former Sports Direct auditors braced for £2m fine over Ashley disclosures UK firms begin world’s biggest four-day week trial – with no loss of pay Mercedes recalling nearly one million vehicles over braking fault US hedge fund sues London Metal Exchange for $456m over ‘irrational’ nickel trading decision Petrol prices keep climbing to new record – adding 0.6p in 24 hours Rangers FC, JD Sports and Elite Sports fixed kit prices, competition watchdog says Average UK house prices up 15.5% in the year to July Barclays reports first-quarter profit above expectations