Unilever announced on Thursday its decision to implement price increases to counter the impact of elevated costs attributed to the ongoing Iran conflict. The company also reported better-than-expected underlying sales growth in the first quarter, surpassing analysts’ projections.
Despite the heightened economic uncertainty, Unilever maintained its 2026 sales and profit margin forecasts unchanged, indicating its readiness to navigate the challenging cost environment. The planned price adjustments will be targeted at specific markets and product categories, particularly those exposed to crude oil prices, with the implementation primarily scheduled for the latter part of the year, as outlined by finance chief Srinivas Phatak during an analyst call.
Unilever anticipates the highest price hikes in regions such as parts of Asia, Africa, and Latin America, where inflation has been most pronounced, while the impact on North America is expected to be less significant due to the company’s smaller home-care business presence in that region. Phatak emphasized that the price adjustments would be strategic and competitive in nature.
Amid surging commodity prices and supply chain disruptions stemming from the conflict involving the U.S. and Iran, consumer goods companies are facing significant cost pressures. Unilever foresees a total cost inflation ranging from approximately 750 million to 900 million euros for the full year, encompassing increased logistics and factory expenses.
Phatak noted that Unilever plans to implement incremental price increases to counter inflationary pressures, with the possibility of higher adjustments if the need persists. The company last raised prices by three percent in the fourth quarter of 2024, following the aftermath of the COVID-19 pandemic and the Ukraine crisis.
Unilever’s competitors, including Nestlé and Procter & Gamble, have also signaled concerns about mounting costs due to the conflict with Iran. As companies brace for potential softening demand amid sustained high oil prices and prolonged geopolitical tensions, Unilever remains focused on balancing price adjustments to maintain sales volumes and consumer loyalty.
The company’s first-quarter sales growth was primarily driven by robust volumes, especially in its beauty and home segments, reflecting a shift towards volume-led growth strategies. CEO Fernando Fernandez highlighted the positive performance of Unilever’s Power Brands, such as Dove and Axe, driving the company’s overall growth trajectory.
Fernandez, who assumed the role of CEO after serving as the finance chief, is overseeing Unilever’s strategic transformation towards a more focused personal care and beauty portfolio. This restructuring follows the recent divestment of its ice cream business and the proposed merger of its food division with McCormick. Unilever’s underlying sales growth of 3.8 percent in the first quarter exceeded analysts’ expectations, showcasing a promising start to the year.