Unilever announced on Thursday its decision to implement price hikes to counter the impact of escalating costs attributed to the conflict in Iran. This move comes alongside Unilever’s strong first-quarter sales growth, which exceeded analysts’ expectations. The company, known for products such as Dove soap and Axe deodorant, maintained its 2026 sales and profit margin projections unchanged, indicating its confidence in navigating the current economic uncertainties.
The planned price adjustments will be targeted at specific markets and product categories, particularly those exposed to fluctuations in crude oil prices, with the changes expected to take effect mainly in the latter part of the year. According to Srinivas Phatak, the company’s finance chief, the regions most affected by inflation, such as parts of Asia, Africa, and Latin America, will witness the most significant price increases, while North America, with a smaller home-care business for Unilever, will see less impact.
Phatak emphasized that the price adjustments would be strategic and competitive. Unilever, like many other consumer goods companies, is grappling with a challenging cost environment due to rising commodity prices and disruptions in the supply chain caused by global conflicts. Unilever anticipates total cost inflation for the year to range between 750 million to 900 million euros, encompassing increased logistics and production expenses.
The company intends to implement incremental price increases in response to inflationary pressures, with Phatak mentioning the possibility of higher adjustments within the two to three percent range if the need arises. Unilever last raised prices by three percent in the final quarter of 2024, following the aftermath of the COVID-19 pandemic and the conflict in Ukraine.
Analysts, such as Chris Beckett from Quilter Cheviot, underscore the importance for Unilever to balance price adjustments with maintaining sales volumes, especially in constrained markets like Europe. The Iran war has prompted 36 companies, including Unilever’s competitors like Nestlé and Procter & Gamble, to signal price hikes due to increased costs.
Unilever’s recent sales growth in the first quarter was primarily driven by higher volumes, particularly in their beauty and home segments, reflecting a shift back to volume-driven growth after a period of relying on price increases. CEO Fernando Fernandez highlighted the positive start to the year, attributing the growth to the performance of their Power Brands like Dove and Axe. Fernandez, who assumed the CEO role last year, is leading Unilever’s strategic shift towards personal care and beauty following recent business restructuring initiatives.
Unilever reported an underlying sales growth of 3.8 percent in the first quarter of 2026, surpassing analyst expectations of 3.6 percent growth. This performance underscores the company’s resilience amidst challenging market conditions and its strategic focus on sustainable growth.