Unilever shares hit by Q3 sales growth miss

Marco Green
October 19, 2017

Unilever posted sales for the third quarter that were lower than had been expected, losing market share to competitors that are much smaller and lowering hopes that the failed attempt by Kraft Heinz to buy the company would spark quick improvement.

Unilever announced in a statement this morning that growth in the third quarter of the year was adversely affected by poorer weather in Europe and natural disasters in the Americas.

However, Unilever held its underlying annual sales growth forecast at within the 3 to 5 per cent range. Nestle, like Unilever, flagged flat sales in North America where it said the environment was hard.

Turnover of €13.2bn was down 1.6% year on year, reflecting a 5.1% headwind from currency and a positive 0.9% contribution from M&A, or down 1.5% to €12.5bn if excluding spreads.

Emerging markets underlying sales growth in the third quarter 6.3% with volume up 1.8%.

Life is becoming more hard for the consumer goods giants, as competition from smaller, nimbler players intensifies and consumer preferences shift towards niche and alternative brands.

Earlier Thursday, Nestle reported organic sales growth of 2.6% for the first nine months of the year, a slowdown from the 3.3% it reported a year earlier.

The ice cream business for Unilever, which includes Wall's and Ben & Jerry's, saw declines of double-digits in Europe due to inclement weather, and suffered losses in market share in the U.S.to Halo Top a new brand.

"While conditions in our developed markets remain challenging, we are starting to see signs of improvement in some of our biggest emerging markets including India and China", he said. That figure fell far short of analyst expectations of 3.9pc growth and a 3pc increase in the first half of the year.

Rotterdam-based Unilever, which employs some 169,000 people around the world, spurned a takeover bid by United States rival Kraft Heinz in February.

Other reports by Click Lancashire

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