Unilever raised its full-year sales guidance after beating first-half underlying sales forecasts as the maker of Dove soap and Knorr stock cubes hiked prices to counter soaring costs, sending its shares up 2.9%.

One of the biggest consumer companies in the world, with more than 400 brands ranging from detergent to ice cream, Unilever's costs have surged since the start of the Covid-19 pandemic created global supply chain logjams.

War in Ukraine has since boosted energy costs and sent prices of raw materials such as wheat, sunflower oil and pulp used in packaging to record highs.

Unilever said it sees net material inflation at about €4.6 billion this year, including a €2.6 billion hit in the second half.

Unilever's first-half operating profit margin fell to 17% from 18.8% a year earlier, even as Unilever raised prices by 9.8%.

The price hikes come despite retailers pushing back against consumer product suppliers, worried about ceding margins and alienating shoppers.

US giant Walmart, the world's biggest retailer, on Monday slashed its profit forecast as surging prices for food and fuel prompted customers to cut back on spending.

"We did see their news this morning, but I think there are many, many aspects to that don't fully connect with Unilever," the British firm's chief financial officer Graeme Pitkethly said on a call with journalists, noting that Walmart's announcement was related more to general merchandise and clothing, and that inflation would vary by region.

However, Pitkethly added: "We expect peak inflation to come in the second half of the year. I don't think we'll be able to catch up in the current quarter."

"We're not going to go back to the previous low inflation environment - we're going to be stuck in this environment for a significant amount of time," said Andy Searle, a partner at consultancy Alix Partners.