On Thursday, Unilever (ULVR.L), manufacturer of Dove soap and Ben & Jerry’s ice cream, beat quarterly sales predictions despite a minor volume drop due to another price increase.
Prices rose 10.7%, lower than in prior quarters, suggesting inflationary pressures may recede as input costs fall.
Packaged product firms have raised pricing as sunflower oil, transportation, packaging, and grain prices rise.
Consumers have handled the cost-of-living crunch better than many experts predicted, but corporations’ profits might suffer if they start buying cheaper goods in bigger numbers.
According to a company-provided estimate, Unilever’s underlying first-quarter sales rose 10.5% to 14.8 billion euros ($16.4 billion), exceeding analysts’ average 7.2% projection.
Prices rose 10.7%, and volumes fell 0.2%. The price increase was slower than the previous two quarters, down from a record 13.3% in February, while the volume decline improved from 3.6%.
“We think it (price hikes) will step down from there… it will start to taper off over the quarters,” finance head Graeme Pitkethly told journalists on a teleconference, adding that Unilever’s divisions will lower prices at varying rates.
“Beauty, wellbeing, and personal care – they are seeing much lower inflation, hence the lower rates of pricing… homecare is a bit of a mixed bag given the emerging market footprint and foreign exchange evaluations.”
Price rises offset reduced volumes to boost quarterly sales for rivals P&G (PG.N) and Nestle (NESN.S).
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