Consumer goods companies, Cadbury, Nestlé and Unilever Nigeria Plc, on the Nigerian Exchange, started 2026 with mixed results as high production and operating expenses stressed margins, even though revenues and profits improved across parts of the sector.
Quarter one results released by the three companies show a split in performance. Unilever strengthened margins and maintained strong cost control, Nestlé stayed profitable while working through finance and leverage pressure, while Cadbury faced the toughest squeeze on earnings despite growing sales.
Investors have piled into the three stocks since last year. Even with issues around inflation, weak consumer spending and higher operating costs, the companies are still among the strongest gainers on the NGX consumer goods index.
As of May 22, 2026, Cadbury’s share price had risen 15.2% this year to N69 from N59.90 at the start of January, after returning 179% in 2025.
Unilever gained 133% year-to-date, climbing from N72 to N168 following a 124% rally last year, while Nestlé advanced 59.6% to N3,125 from N1,958 after returning 119% in 2025.
Despite the sharp rallies, technical indicators still reveal investors do not see the stocks as heavily overstretched. Nestlé’s 14-day Relative Strength Index stood at 32.43, Cadbury closed at 51.18, while Unilever came in higher at 66.02.
Together, the three companies generated N425.13 billion in revenue during the first quarter, up 12.15% from the same period last year. Gross profit also rose 12.5% to N169.56 billion, leaving combined gross margin almost unchanged at 39.88%.
Pressure became more visible lower down the income statement.
Combined operating profit slipped slightly to N91.64 billion because selling, marketing, distribution and administrative expenses rose faster than revenue growth. Operating margin fell to 21.55% from 24.30% a year earlier.
Still, lower finance costs helped soften the impact. Combined pre-tax profit climbed 31.14% to N92.39 billion, while post-tax profit rose 19.05% to N49.66 billion.
Even with the increase, the companies retained less than N12 in profit from every N100 in revenue.
Cadbury recorded the weakest margin performance among the three firms.
The company grew revenue by 7% to N39.83 billion in the first quarter, but the cost of sales rose faster at 15.43%, pushing gross profit down 10.39% to N10.89 billion. Gross margin dropped to 27.34% from 32.65%.
Operating expenses also jumped sharply to N5.88 billion from N2.86 billion. That dragged operating profit down by more than half to N4.72 billion, while operating margin weakened to 11.85% from 26.02%.
Cadbury’s finance position improved during the quarter. The company reported an unrealised foreign exchange gain of N870.60 million compared with N75.89 million in the same period last year, while interest expense on borrowings dropped to N370.63 million from N1.12 billion.
That helped the company move from a net finance cost position in Q1 2025 to a net finance income of N477.92 million this year. Even so, profit after tax still declined 39% to N3.64 billion.
The weaker margins also affected earnings per share, which fell to 160 kobo from 262 kobo a year earlier.
Still, Cadbury’s balance sheet showed some improvement. Shareholders’ equity rose 27% to N17.06 billion. However, cash reserves weakened significantly as net cash declined to N8.76 billion from N15.02 billion at the start of the year, largely due to inventory build-up and loan repayments.
Nestlé was the biggest revenue and profit generator among the three companies.
The food company grew first-quarter revenue by 10.59% to N326.13 billion, while profit after tax increased 29.23% to N39 billion.
Gross margin stayed broadly flat at 40.49%, but operating costs continued to rise. Operating expenses increased to N56.84 billion from N45.86 billion, reducing the operating margin to 23.13% from 25.14%.
Finance costs, however, eased considerably and supported profit growth.
The latest result also marked Nestlé’s sixth consecutive profitable quarter since returning to profit in late 2024. The company linked the recovery to naira stability and improved margin management.
Its balance sheet also improved during the quarter. Shareholders’ equity rose sharply to N51.6 billion in March 2026 from N12.9 billion at the end of December 2025.
Even with the recovery, investors are still watching whether the company can sustain profitability, reduce leverage and return to regular dividend payments. Nestlé last paid dividends in 2022.
Unilever delivered the strongest operational performance of the three companies.
Revenue rose 25.96% to N59.17 billion, while the cost of sales increased at a slower pace of 15.77%. That lifted gross profit by 41.17% to N26.61 billion.
Gross margin improved to 44.98 per cent from 40.13%, while operating profit climbed 38.88% to N11.48 billion. Operating margin also strengthened to 19.41% from 17.60%.
Unlike Cadbury and Nestlé, Unilever’s earnings growth came largely from stronger operations and higher cost management rather than relief from finance costs.
The company also maintained the healthiest balance sheet among the three firms. It closed the quarter with positive working capital of N93.36 billion, a current ratio of 2.34 times and a debt-to-equity of just 0.02 times.
Unilever is also still ahead on shareholder returns; the company paid N3.75 per share in dividends in 2025, while Cadbury and Nestlé have not declared dividends since 2022.
Unilever appears to be benefiting from stronger operations, healthier liquidity and lower debt exposure. Nestlé’s recovery is gaining ground, although leverage and dividend consistency are still issues to be dealt with. Cadbury, meanwhile, is still growing sales but faces challenges from growing costs and weaker liquidity.
