Naturally, with rising commodity prices, I expected the company to feel at least a margin squeeze, but Unilever has been proactive and has raised prices 4.8% in the quarter to offset its rising costs. The company increased not only prices but also managed to grow sales of Dove soap, Hellmann's mayonnaise and Lipton tea to post a first-quarter net income climb of 33% and exceed analysts' estimates.
Apparently, the company's Boursin cheese unit, which took the brunt of the price increase, also helped boost gains as revenue grew 7.2% and sales rose 14% in the Asia Africa region and 9.6% in Latin America, making up for disappointing growth in Europe.
Well, now analysts called the earnings excellent, and indeed, seeing such proactive moves is refreshing. The consumer product company has been rewarded from the aggressive action it has taken as it forecasts to beat its own growth goal.
While I know many male readers cringed each time they saw a Dove commercial from its Campaign for Real Beauty, but fact is the campaign was brilliant, at least among main Dove consumers -- females -- and it seems top management has been brilliant lately too. As the company continues to buy back shares, cut jobs and sell assets on top of showing it can handle the current economic climate, further share appreciation might be in the cards.
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