Unilever posted stronger-than-expected underlying sales growth for the fourth quarter, but warned that softer market conditions could constrain expansion in the year ahead.
The consumer goods company said underlying sales rose 4.2% in the three months to December 31, outpacing the 3.9% median estimate compiled by analysts. Management attributed the outperformance to robust consumer demand for brands including Dove and Vaseline.
Corporate moves and leadership changes have reshaped the group in recent months. The company completed the spin-off of The Magnum Ice Cream Company in December. Fernando Fernandez, who became chief executive in March 2025, now faces pressure to demonstrate that Unilever's strategic emphasis on personal care and beauty and wellbeing is producing results. Those categories now account for more than half of the group's turnover.
Looking ahead, Unilever said it expects 2026 growth to come in at the bottom end of its multiyear underlying sales growth guidance range of 4% to 6%, explicitly citing slower market conditions as the reason for the more cautious outlook. The company highlighted the potential for market weakness to weigh on growth this year.
On profitability, Unilever reported annual underlying operating profit of 10.1 billion euros, a 1.1% decline from the prior year. That figure was roughly in line with market expectations of 10.12 billion euros. The company and markets are operating with an exchange reference in the report of $1 = 0.8428 euros.
Context and immediate takeaways
- Fourth-quarter underlying sales growth: 4.2% (company reported) versus 3.9% expected by analysts.
- Brands cited as drivers: Dove and Vaseline.
- Strategic update: The Magnum Ice Cream Company was spun off in December; personal care and beauty and wellbeing now represent more than half of turnover.
- Leadership: Fernando Fernandez took the chief executive role in March 2025 and faces pressure to validate the personal-care-focused strategy.
- Profitability: Annual underlying operating profit fell 1.1% to 10.1 billion euros, near market expectations of 10.12 billion euros.
- Guidance: 2026 growth is expected at the bottom of the company's 4% to 6% underlying sales growth guidance range due to slower markets.
Unilever's quarterly performance shows pockets of brand strength even as management cautions investors that broader market dynamics could limit growth. The figures leave the company with the task of delivering against a strategic shift toward higher-margin personal care and wellbeing categories while navigating a cooling market environment.