UNILEVER warned on Thursday that 2026 sales growth would come in at the bottom end of its forecast range after a slowdown in the US and Europe, knocking its shares, even as emerging markets delivered a fourth-quarter sales beat.
After spinning off The Magnum Ice Cream Company in December, CEO Fernando Fernandez ― who took over in March 2025 ― is under pressure to show that Unilever's emphasis on personal care, beauty and well-being, which now account for more than half of turnover, is a winning strategy.
The maker of Dove soaps and Hellmann's mayonnaise said it expects 2026 underlying sales growth at the lower end of its 4 percent to 6 percent multiyear guidance range due to softer market conditions.
Even so, Unilever said it expects a "modest" improvement to the 20-percent profit margin reported for 2025 and unveiled a new 1.5 billion euros ($1.8 billion) share buyback program.
Its shares fell more than 3 percent in early trading before trimming losses to trade 0.6 percent lower.
"There are signs of progress at Unilever given its reorganization and new strategy, however we think it will take time," RBC Capital Markets analyst James Edwardes Jones said in a note.
Slowing US and Europe
Barclays analysts said in a note last month that 2026 would be "the acid test" for Unilever without the distractions of the Magnum Ice Cream spin-off and abrupt CEO change seen in the first half of last year.
Underscoring the challenge ahead, Fernandez told analysts on a call that prices would likely rise by around 2 percent this year, below the 3 percent average of the past decade.
"Cost of living pressures continue to impact in developed markets and while the consumer is doing ‘okay-ish’ it is far from firing on all cylinders and that will impact the branded goods sector," said Chris Beckett, consumer staples analyst at Quilter Cheviot.
Fourth-quarter underlying sales growth beat expectations, coming in at 4.2 percent versus the 3.9 percent forecast in a company-compiled poll. Emerging markets such as India, Indonesia and China continued to drive growth.
But there are concerns that emerging markets may not provide enough support if developed-market growth keeps slowing.
In North America, sales growth eased to 2.8 percent in the quarter, though Unilever said it continued to gain market share.
Fernandez said North America had made a "good start" to this year. Sales in Europe edged up 0.1 percent.
Both regions slowed from the third quarter.
Annual underlying operating profit dipped 1.1 percent to 10.1 billion euros, broadly matching market expectations of 10.12 billion euros.
"Overall, the scale and pace of change in 2025 underlines that this is a different Unilever," finance chief Srinivas Phatak told analysts.
