Unilever beats forecasts, but inflation a worry

Unilever reported strong second quarter sales on Thursday (July 22), but there was a catch for investors.

The British multinational warned surging commodity costs would squeeze its full-year operating margin.

Sales for the maker of Dove soap rose 5% from April to June - above forecasts.

Its Food and Refreshment division saw strong growth as living restrictions eased in many markets.

But rising prices of key supplies saw the company cut its operating margin outlook to 'about flat'.

Chief Executive Alan Jope said uncertainty around commodity costs had meant 'a higher than normal range of likely year end margin outcomes'.

Addressing a separate controversy, Jope said the company was "fully committed" to Israel.

Unilever has faced pressure in the country after its subsidiary Ben & Jerry's ended ice cream sales in the occupied Palestinian territories.

Prime Minister Naftali Bennett called it a clear anti-Israeli step, and warned of ‘severe consequences’.

The decision also led to a clash between Unilever and Ben & Jerry's independent board.

Unilever shares were down more than 5% in morning trade Thursday.

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