Unilever announced on Thursday its intention to implement price hikes in response to elevated costs influenced by the Iran conflict, while also revealing better-than-expected underlying sales growth for the first quarter. The company, known for brands like Dove and Axe, maintained its 2026 sales and profit margin projections, indicating its preparedness to navigate the current economic uncertainties.
The planned price adjustments will primarily target specific markets and product categories, particularly those exposed to crude oil fluctuations in home care segments. These price modifications are anticipated to roll out predominantly in the latter half of the year, with a focus on regions such as Asia, Africa, and Latin America, where inflationary pressures have been more pronounced compared to North America.
Unilever’s Chief Financial Officer, Srinivas Phatak, emphasized that the pricing strategy would be strategic and competitive, ensuring a balanced approach. The company foresees encountering significant cost pressures amounting to approximately 750 million to 900 million euros for the full year, encompassing increased logistics and manufacturing expenses.
Acknowledging the challenging cost environment driven by soaring commodity prices and disruptions in the supply chain due to geopolitical tensions, consumer goods companies are grappling with the need to adjust prices to reflect these changes. Unilever, along with industry peers like Nestlé and Procter & Gamble, is preparing to address the impact of heightened costs resulting from the ongoing conflict.
Unilever’s decision to raise prices comes after a previous adjustment in late 2024 post the COVID-19 pandemic and Russia’s involvement in Ukraine. Analysts highlight the importance for Unilever to strike a balance between price hikes and maintaining consumer demand, particularly in constrained markets like Europe.
The company’s recent sales growth surge in the beauty and home sectors, driven by increased product volumes, signals a shift towards volume-driven growth strategies as opposed to relying solely on price increases. CEO Fernando Fernandez expressed satisfaction with the strong start to the year, emphasizing the positive performance of key brands like Dove and Axe, amidst ongoing restructuring efforts within the company.
Unilever’s strategic redirection towards personal care and beauty products, following recent divestitures and mergers, has positioned the company for continued growth. The reported underlying sales growth of 3.8% for the first quarter exceeded analyst expectations, reflecting the company’s resilience amid challenging market conditions.