28 July 2026
If you are covering Unilever’s latest results, please see the following comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
“Markets have reacted positively to Unilever’s latest results, with its shares rising around 6% following a strong quarter. The company comfortably exceeded sales growth expectations, with volumes increasing 5.5%, roughly double what had been anticipated. While earnings only came in modestly ahead of forecasts, most of the focus will rest on the strength of its sales performance. Pricing remained relatively subdued during the quarter, with a greater contribution expected in the second half of the year.
“Personal care was the standout performer, with beauty and wellbeing brands such as Dove, Vaseline and Sunsilk driving much of the growth. Europe was a weaker spot geographically, although this was offset by healthy momentum across Emerging Markets. Meanwhile, the foods division delivered flat sales, which may raise some questions ahead of the planned merger with McCormick. Competition in key US condiment categories remains strong, particularly for Hellmann’s, and investors will be watching closely to see how this affects the valuation placed on the combined good business.
“Despite today’s positive share price reaction, Unilever still trades on a relatively modest valuation of around 16 times 2027 earnings. Its earnings growth remains subdued, with expectations for 4% compounding growth over the next two years. Historically, high quality consumer staples companies have been able to translate this level of sales growth into much stronger earnings, supporting a premium valuation. Unilever is making progress in improving sales growth, but more of that momentum will need to translate into profit growth before it can secure a full rerating.”
