UN Unilever NV

Unilever PLC (ULVR.LN) Thursday posted a forecast-beating rise in sales, driven by volume and pricing gains in emerging markets, but the consumer goods giant warned the global economic and cost environments remain challenging.

"Our performance is pleasing given struggling economies, continued fragile consumer confidence and competitor activity," Chief Executive Paul Polman said in a statement.

Consumer purchases in the booming economies of Asia, Africa, Latin America, the Middle East and Eastern Europe contrast with softer performances in Western Europe and North America, as the globalized industry gradually shifts growth eastwards.

The company, like its peers, faces a challenging outlook in mature markets from industry competition and government-backed austerity measures, which are squeezing shoppers' discretionary spending.

"The external macro-economic environment remains difficult and higher input cost headwinds persist," Polman said.

The Anglo-Dutch maker of Ben & Jerry's ice cream and household products such as Dove and Cif said first-quarter sales, stripping out acquisitions, disposals and currency movements, rose 8.4% compared with a year earlier, ahead of a company-produced analyst consensus forecast of 6.4%.

This measure of sales, which compares with a rise of 4.3% in the same period last year and a 6.6% increase in the previous three months, is a closely watched, directly comparable measure of how the company's products are selling.

Unilever's total sales in the quarter rose 12% to EUR12.1 billion compared with a year earlier.

First-quarter volumes, stripping out acquisitions, disposals and currency movements, rose 3.5%, compared with 2.5% growth recorded in the same period last year and a 0.1% increase in the fourth quarter, or 1% after adjustment for sales brought forward.

First-quarter pricing rose 4.7% as the consumer goods giant tried to pass on higher costs to consumers.

The company recommended a dividend of EUR0.24, up 8% compared with a year earlier.

It said it is on track to deliver a "modest improvement" in full-year core operating margin, weighted toward the second half of the year.

Unilever reiterated its guidance of profitable volume growth, steady and sustainable core operating margin improvement and strong cash flow.

Unilever shares closed Wednesday at 2079 pence, valuing the company at GBP26.7 billion.

-By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410; simon.zekaria@dowjones.com

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