* Turnover up 14.9%
    * Peak inflation expected in H2 -CFO
    * Future of Ben & Jerry's is as part of Unilever -CEO
    * Shares rise as much as 3.2%

 
    By Richa Naidu
    LONDON, July 26 (Reuters) - Unilever Plc 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, lifting its shares on
Tuesday.
    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 euros this year, including a 2.6
billion euro 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. 
    U.S. giant Walmart Inc, 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.
    
 Unilever H1 results          H1 2022         H1 2021
 Turnover                     29.6 bln euros  25.8 bln euros
 Turnover change              14.90%          0.30%
 Underlying sales growth      8.10%           5.40%
 Underlying operating margin  17.00%          18.80%
 Underlying EPS               1.34 euros      1.33 euros
 Underlying EPS growth        1.00%           minus 2.0%
 Closing net debt             27.1 bln euros  22.4 bln euros
 Net debt change yr/yr        20.98%          minus 1.75%
    SALES OUTLOOK RAISED
    Unilever this year made room on its board for activist
investor Nelson Peltz, whose Trian investment vehicle had built
up a 1.5% stake as of last month.
    Peltz "is making a very constructive contribution as a board
member," CEO Alan Jope said on a call with journalists but he
declined to elaborate.
    Underlying sales grew 8.1%, beating analyst expectations of
7.2% growth, according to a company-provided consensus for the
half to June 30.
    Unilever said Tuesday it now expects to beat its previous
forecast for full-year underlying sales growth of 4.5% to 6.5%.
    Bernstein analysts in a note described the results as
"good", with pricing better than expected and volumes in line,
boding well for the company's ability to keep investing in
growth.
    Investors cheered the results, with Unilever shares rising
almost 3.2% at their high. The stock was up 2.0% as of 1019 GMT,
still among the top gainers on the FTSE 100 index.
    "Underlying sales growth of 8.1% was driven by strong
pricing to mitigate input cost inflation, which, as expected,
had some impact on volume," Jope said. "The challenges of
inflation persist and the global macroeconomic outlook is
uncertain."
    Its half-year turnover rose 14.9% to 29.6 billion euros 
($30.25 billion) even as sales volumes declined by 1.6%.
    CFO Pitkethly said Unilever had raised spending on
advertising and branded marketing by 200 million euros in the
first half to prevent shoppers from trading down to private
label products.
    The company kept its quarterly dividend steady at 0.4268
euro per share and said it had completed a 750 million euro
share buyback tranche on July 22, part of a 3 billion euro plan
announced last year.
    Swiss chocolate maker Lindt & Spruengli on Tuesday
also raised its sales guidance after its first-half net profit
jumped 36%.
    Unilever, which owns Vermont-based Ben & Jerry's, has
struggled over the past year to keep the ice cream maker's
independent board from publicly voicing its opinions about
political matters. 
    This month, Ben & Jerry's sued parent Unilever to block the
sale of its Israeli business to a local licensee, saying it was
inconsistent with its values to sell its ice cream in the
occupied West Bank.
    "The long-term future of Ben & Jerry's is squarely as part
of Unilever," Jope said, adding that "there is plenty for Ben &
Jerry's to get their teeth into in their social justice mission
without straying into geopolitics."
        ($1 = 0.9787 euros)

 (Reporting by Richa Naidu; editing by Jason Neely)