Unilever posts strongest sales growth in a decade

Unilever PLC ( LSE:ULVR ) has nudged its full-year outlook upwards after posting its strongest quarterly volume growth in more than a decade. The consumer goods group reported underlying sales rose 5.8% in the second quarter, ahead of the 4.14% City analyst consensus and up from 3.8% in the first quarter. Sales volumes increased 5.5% against expectations of 2.29% and revenue rose 3.8% to €13.05 billion, topping the €12.87 billion forecast. Chief executive Fernando Fernandez called it "the best volume quarter at Unilever in over a decade", with Power Brands and emerging markets leading the improvement. For the first half of the year, underlying operating profit rose 0.9% to €5.19 billion, slightly above the €5.16 billion consensus, while the underlying operating margin matched expectations at 20.3%. Unilever now expects full-year underlying sales growth of 4% to 6%, with volume growth of around 3%. It previously expected sales growth at the lower end of the multi-year 4-6% range and at least 2% volume growth. Second-half sales growth is forecast at 4% to 5%, led by price rises as the company responds to commodity inflation. Unilever also expects a "modest improvement" in its full-year operating margin from 20% in 2025. Home Care led the first half with underlying sales growth of 7.6%, followed by Beauty & Wellbeing at 5.9% and Personal Care at 4.8%. Foods grew just 1.2%, reflecting softer developed markets and increased competition in US condiments. The quarterly dividend of €0.4664 was in line with Q1 and up 3% versus last year, with a €1.5 billion share buyback completed in June.