Unilever, opens new tab beat first-quarter sales forecasts on Thursday as the maker of Dove soaps and Hellmann’s mayonnaise won back shoppers who had traded down to cheaper products during the recent surge in global inflation.

Shares in the consumer goods giant rose more than 4% after it reported a 4.4% rise in underlying sales growth, topping analysts’ average forecast of 3% in a company poll.
Sales volumes climbed 2.2%, the second quarter of growth after several declines. Prices were also up 2.2%.

Consumer goods companies are fighting to recover volumes lost after months of price increases made to pass higher costs onto customers. Prices initially rose due to the pandemic, and then as energy costs soared after Russia’s invasion of Ukraine.

“We have increasing confidence in our ability to deliver sustained volume growth as we accelerate gross margin expansion,” CEO Hein Schumacher said in a statement.

Unilever also kept its full-year guidance for underlying sales growth within its multi-year range of 3% to 5%, but added it expected volumes to increasingly drive this growth. It had previously guided for “more balance between volume and price”.

The company’s price hikes gradually slowed in 2023, and that trend continued in the first quarter of this year.
After years of underperformance, Unilever unveiled a “Growth Action Plan” (GAP) in October. This involves investing more in its top 30 brands that represent over 70% of sales, supporting innovation, and working towards a better operating discipline.

“This is a useful print for company’s ‘GAP’ strategy credibility,” Jefferies analyst David Hayes said of the first-quarter results, as the company either beat or met organic sales growth and volume expectations in all divisions and regions.