(Bloomberg) -- Unilever Plc turned the tables on Nestle SA in the first quarter, as the UK consumer goods company outperformed its Swiss rival after years of lagging behind.

The Anglo-Dutch maker of Knorr stock cubes and Dove soap said sales jumped more than expected as Chief Executive Officer Hein Schumacher pushed ahead with his turnaround plan and easing inflation encouraged shoppers to buy premium brands again. 

The company recorded growth in every region, unlike Swiss rival Nestle, which slumped Thursday after sales growth fell to its lowest level since at least 2020 on weakness in North America. 

The downbeat results extend a recent run of poor form for Nestle. The world’s biggest food maker has disappointed investors in the last few quarters, with IT problems affecting its vitamins unit and now tepid demand for its frozen food in the US. 

CEO Mark Schneider was credited with clinically revamping Nestle, shedding non-core brands to refocus on higher-growth businesses. Now Unilever’s turnaround seems to be taking hold.

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The company, once accused of having “long Covid” and “pedestrian results” by a key shareholder, has lacked strategic direction in recent years and angered investors with missteps, such as a botched attempt to buy the consumer division of GSK Plc. 

Schumacher’s revival plan involves a potential spinoff of its ice cream division, job cuts, and a significant watering down of environmental and social pledges.

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While figures from Unilever and European rivals Danone and Reckitt Benckiser Group suggest that shoppers are starting to move back to big brands, Nestle appears to be an outlier from this trend for now. 

J Sainsbury Plc, Britain’s second-largest grocer, said Thursday it too is seeing less evidence of shoppers trading down to cheaper brands. 

“We’ve seen more evidence of customers starting to trade up a bit as well,” said CEO Simon Roberts, after lifting the grocer’s profit forecast for the year. 

Nestle shares fell nearly 5% in early trading, the biggest decline in two months. The stock is down about 20% in the past year. Shares of Unilever are up more than 5% on Thursday and the stock is down less than 8% in the past year. 

Schneider said “significant financial pressures” for lower-income Americans, many of whom have seen a reduction in government-led nutritional assistance programs, hurt its performance in the first quarter. As Nestle laps the withdrawal of assistance programs, the numbers should start to improve, he told reporters on a call. 

US rival PepsiCo Inc. and French spirits maker Pernod Ricard SA have also experienced weaker demand in North America.

Unilever, by contrast, performed relatively well in the US, where sales grew 3.6%, boosted by the group’s more premium offerings. It may only be the first quarter, but the “improved momentum” shows that the turnaround is on track, Schumacher said. 

Nestle has faced difficulties on other fronts, including the IT integration issue at its vitamin business which is still hurting sales. Its waters division admitted to using filtering methods that were not allowed for mineral water in France, while it’s been scrutinized for adding sugar to its infant food products.

--With assistance from Jennifer Creery.

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