Unilever announced on Thursday its decision to implement price increases in response to elevated costs stemming from the Iran conflict, alongside reporting stronger-than-expected underlying sales growth for the first quarter. The company, known for products like Dove soap and Axe deodorant, maintained its sales and profit margin projections for 2026, indicating confidence in managing the current economic uncertainties.
The price adjustments will be targeted at specific markets and product categories, particularly those linked to crude oil, with the changes expected to take effect mainly in the latter half of the year. According to Srinivas Phatak, the company’s finance chief, regions such as Asia, Africa, and Latin America, where inflation has been most pronounced, will experience the highest price hikes compared to North America, where Unilever’s home-care segment has a smaller footprint.
Phatak emphasized that the price increases will be strategic and competitive, ensuring a balanced approach. The ongoing surge in commodity prices and disruptions in the supply chain due to geopolitical tensions have presented significant challenges for consumer goods companies, necessitating adjustments to mitigate the impact on product pricing.
Unilever anticipates total cost inflation of approximately 750 million to 900 million euros for the full year, encompassing increased logistics and production expenses. Phatak indicated that the company plans to implement incremental price adjustments to address inflationary pressures, with the possibility of higher increases if the need persists.
Consumer goods giants like Nestlé and Procter & Gamble have also acknowledged the cost implications of the Iran conflict, with Unilever’s industry peers highlighting margin pressures. Despite the pricing challenges, Unilever is focusing on driving sales volumes while balancing pricing strategies to meet market demands effectively.
The company’s recent sales growth was primarily bolstered by robust volumes, particularly in the beauty and home segments, marking a shift towards volume-driven growth after a period of relying heavily on price hikes. Unilever’s CEO, Fernando Fernandez, expressed satisfaction with the performance of their key brands and highlighted a positive trend across all business divisions.
Fernandez, who assumed the CEO role following a restructuring, is steering Unilever towards a sharper focus on personal care and beauty, following strategic business divestments and mergers. Unilever’s underlying sales growth of 3.8% in the first quarter outpaced analyst expectations, reflecting a strong start to the year for the company’s portfolio of leading brands like Dove and Axe.
