The consumer goods giant Unilever has missed its second-quarter targets on sales and margins and warned that it expects slow economic growth to continue in developed markets.
Paul Polman, the chief executive of Unilever, which makes Lipton tea and Ben & Jerry's ice cream, also warned that its ability to raise prices in a competitive environment would "remain constrained", despite rising commodity costs in the second half.
Despite Unilever's net profit rising by 35 per cent to €2.2bn (£1.8bn) over the half year, investors were unnerved by the company's comments and its shares tumbled by 95p, or 5.19 per cent, to 1,736p yesterday. In the first half, Unilever's underlying sales in Western Europe fell by 1.1 per cent, but rose by 3.8 per cent in the Americas and by 7.9 per cent in Asia, Africa and Central and Eastern Europe.
Mr Polman said: "We continue to operate under the assumption of slow economic growth, particularly in developed markets where consumer confidence remains fragile."