Unilever has upgraded its full-year guidance after delivering its strongest quarterly volume growth in more than a decade during the first half of 2026, although its Foods division continued to lag behind the group's home and personal care businesses.
The consumer goods giant reported underlying sales growth of 4.8 per cent for the first six months of the year, driven primarily by a 4.2 per cent increase in volumes, while turnover edged up 0.5 per cent to €25.6 billion (£21.9bn) despite adverse currency movements. Underlying operating margin improved by 10 basis points to 20.3 per cent, while underlying earnings per share rose 2.4 per cent.
Performance accelerated in the second quarter, with underlying sales growth reaching 5.8 per cent, including 5.5 per cent volume growth, which chief executive Fernando Fernandez described as “the best volume quarter at Unilever in over a decade.”
“Our brands are stronger, our execution is sharper and we are driving Desire at Scale,” Fernandez said. “These results show our ability to continue performing while transforming our portfolio.”
Following the stronger-than-expected first-half performance, Unilever now expects full-year underlying sales growth to be within its multi-year guidance range of 4-6 per cent, with around 3 per cent underlying volume growth. It also anticipates a modest improvement in underlying operating margin from the 20.0 per cent achieved in 2025.
The group's Power Brands, which account for 78 per cent of turnover, continued to outperform, delivering underlying sales growth of 6.0 per cent, supported by 5.4 per cent volume growth. Home Care was the strongest-performing division with 7.6 per cent underlying sales growth, followed by Beauty & Wellbeing at 5.9 per cent and Personal Care at 4.8 per cent.
In contrast, the Foods division recorded modest underlying sales growth of 1.2 per cent, entirely driven by volumes, with flat pricing. Emerging markets supported growth, but developed markets declined amid weaker demand and tougher competition in the US condiments market, where Unilever said it is taking steps to recover market share in premium and avocado mayonnaise. Unilever Food Solutions delivered low-single-digit growth.
The results come as Unilever continues preparations to separate its Foods business and combine it with McCormick & Company, a deal announced in March that will transform Unilever into a pure-play home and personal care business.
The company said separation and integration work is progressing well, with project teams focusing on financial carve-out work, tax, antitrust approvals and synergy delivery.
Last week, McCormick announced the planned operating model and executive team for the combined business, together with plans for a secondary London listing. Unilever expects the transaction to complete by mid-2027, subject to shareholder and regulatory approvals.
The proposed combination is also undergoing regulatory scrutiny in the UK. The Competition and Markets Authority (CMA) has invited interested parties to comment on McCormick's planned acquisition of most of Unilever's Foods business, marking the first stage of its review of the multibillion-pound transaction.
Regionally, emerging markets remained the group's growth engine, with underlying sales increasing 7.0 per cent, led by India, Indonesia and Latin America. India delivered 8 per cent underlying sales growth, accelerating to 10 per cent in the second quarter, while North America outperformed its market with 2.7 per cent underlying sales growth. Europe remained subdued, recording a 0.9 per cent decline.
During the period, Unilever also completed its €800 million productivity programme ahead of schedule, finished a €1.5 billion share buyback programme, raised its quarterly dividend by 3 per cent and continued reshaping its portfolio through a series of acquisitions and disposals, including the sale of Graze and its Indonesia Tea business and the acquisition of US supplements company Grüns.
Last year, Unilever spun off its ice cream division, which included the Magnum and Ben & Jerry’s brands.