The region powering Unilever’s Q3 growth
ii’s head of investment rounds up the morning’s big news.
28th October 2026 09:34
by Victoria Scholar from interactive investor
Unilever (LSE:ULVR) has reported third-quarter sales up 6.7% to 13.3 billion euros, ahead of expectations, while underlying sales grew by 5.2%, also ahead of forecasts.
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The company issued an optimistic outlook for improving operating margins and full-year underlying sales growth of between 4% and 6%. The consumer goods giant is returning cash to shareholders – its dividend came in line with the previous quarter but is up 3% year-on-year. It will use surplus cash to fund share buybacks.
Unilever's Power Brands delivered an impressive performance, with strong demand for Dove and Vaseline products which enjoyed double-digit growth. Hair Care grew double digits too. The company was able to increase prices to help offset some of the commodity cost inflation pressures.
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Consumers continued to demand Unilever’s branded products, rather than switching to unbranded cheaper alternatives, particularly in emerging markets, with strength in India, Latin America and South-East Asia. Developed markets were more challenging, with a drop in underlying sales growth amid tough year-on-year comparisons and cost-of-living pressures.
Competition pressures in the US condiments market also weighed on sales. However, Unilever is slowly looking to exit the food sector, having agreed a deal with McCormick to combine its food business earlier this year. This is an increasingly tough industry, with shifting consumer preferences away from ultra processed foods and the rise of GLP-1 weight loss drugs.
Unilever said its deal to combine its Foods business with McCormick was on track. Last month the UK competition regulator launched an investigation into the deal, with the Competition and Markets Authority’s deadline set for 11 November for its Phase 1 decision.
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On the whole, Unilever’s trading statement was positive, with forecast-topping quarterly sales growth and strength in emerging markets. However, shares have sold off, indicating that investors were hoping for more. The lack of a significant full-year guidance upgrade may have contributed to the disappointment, as well as some pockets of weakness in the report particularly in its performance in Foods and developed markets which may have dented sentiment.
Shares in Unilever are down around 2% this morning, languishing near the bottom of the FTSE 100, dragging the stock into negative territory year-to-date.
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