Consumer goods company Unilever (ULVR) delivered better-than-expected organic sales growth for Q4. This was driven by strong demand for its Dove, Domestos and Vaseline brands.
The FTSE 100 constituent also announced a new €1.5bn share buyback to start in the second quarter.
| Share price: £52.53 (-1.5%) | PE: 24x |
| Market cap: £114.6bn | Yield: 3.3% |
So why were the shares marked down 1.5% to £52.53 in early dealings? Well, Unilever provided underwhelming guidance, warning that slowing markets could impact growth.
Cautious outlook
Unilever said FY26 growth would be ‘at the bottom end of the underlying sales growth range’ reflecting slower market conditions.
This cautious outlook overshadowed a positive finish to the year. Underlying sales growth of 4.2% beat the 3.9% growth analysts were looking for, with performance driven by ‘a balanced contribution from volume and price’.
Sharper focus
Despite a 3.8% fall in sales to €50.5bn, profits rose 2.9% to €6.2bn in FY25. The company continued to sharpen its focus on higher-growth Beauty & Wellbeing and Personal Care categories. CEO Fernando Fernandez is determined to shake things up at Unilever.
The FTSE 100 powerhouse said its productivity programme is delivering ahead of plan. ‘In 2025 we became a simpler, sharper, and faster Unilever, delivering our commitment to volume growth, positive mix and strong gross margin,’ commented Fernandez.
Sour results
Unilever completed the Ice Cream demerger in December. The Magnum Ice Cream Company (MICC) is now listed as a standalone business in Amsterdam, London and New York.
Unilever has retained a minority stake, but it is worth less today after Magnum shares plunged on poor FY25 results and soft guidance. Nevertheless, Magnum CEO Peter Ter Kulve was ‘particularly pleased with our 1.5% volume growth, reflecting the continued momentum behind our well-loved brands.’
Downbeat guidance is weighing on the stock today, but there is lots to like about Unilever on a long-term view. The well-regarded Fernandez is bringing sharper focus back to this FTSE 100 goliath.
We are also pleased to see Unilever’s core Power Brands spearheading growth.
Read the press release here: https://www.unilever.com/investors/
