By Geoffrey Smith
Investing.com -- Unilever (LON:ULVR) shares edged higher at the open in London on Thursday, as the consumer products giant raised its full-year sales guidance after another strong quarter in the three months through September.
The company said its price increases had had only a "limited effect" on sales volumes, and noted that its premium brands had held up just as well as its discount ones.
"We've seen very little sign of downtrading," Chief Executive Alan Jope told Bloomberg TV.
Underlying sales growth accelerated to 10.6% in the third quarter, as an average price increase of 12.5% was offset by a 1.6% drop in sales volumes. Home Care sales volumes fell 3.6% and Personal Care volumes fell 4.1%, while Ice Cream volumes enjoyed their usual seasonal peak, rising 1.0% even as the maker of Carte d'Or put average prices up by over 13%.
Overall group revenue rose 18% on the year to 15.8 billion euros ($15.8 billion), nearly half of which was due to the euro's depreciation during the period.
The company now predicts full-year sales growth of over 8%, having previously expected it to be as low as 6%.
The company also nudged its quarterly dividend higher to 37.22p a share, up from 36.33p in the second quarter and up from 35.98p a year earlier. In euro terms, the dividend was unchanged at 42.68c.
Unilever is only the latest of the global consumer brands heavyweights to report better than expected earnings in a quarter that has surprised with evidence of consumers' willingness and ability to absorb higher prices.
Jope said in a statement that he expects inflation pressures to remain elevated in 2023, due to the dollar's strength and the rolling off of favorable foreign exchange hedges. He told Bloomberg that higher labor and energy costs in particular are likely to burden next year's numbers. Even so, the company has kept its forecast for underlying operating margin in 2022 at 16%, and Jope said he expects it to improve in both of the next two years, due to cost savings, product mix changes - and more price hikes.
By 03:40 ET (07:40 GMT), Unilever stock was up 0.2% in London.