Consumer goods giant Unilever failed to impress the City as currency swings continued to hit the consumer goods giant after it reported weak third quarter results.
Sales rose just 2.1 per cent — below analysts’ estimates — and sales volumes rose only 0.3 per cent, knocking shares down 66p to 2468p or 3 per cent.
Although US markets are stronger, Europe and Asia remain weak. Sales in China in particular were hit by “de-stocking” where retailers left with unsold supplies choose not to order any more goods until they sell what they have.
Turnover in the quarter was down 2 per cent to €12.2 billion (£9.6 billion), hit by the strength of sterling. The group kicked off a €500 million cost-cutting drive this year to offset the weaker sales and it is still confident of full-year profit growth.
Paul Polman, chief executive, said: “Underlying sales growth of 3.2 per cent in the first nine months is a competitive performance in markets which weakened further as macro-economic conditions continued to put pressure on consumers.We expect markets to remain tough for at least the remainder of the year.”
But he added: “We are confident that we will achieve another year of profitable volume growth ahead of our markets.” Shore Capital analyst Darren Shirley said the sales were “below expectations in tougher markets”. “Management talks of a difficult quarter, with price deflation in the major markets of France, the UK and Germany,” he added.Reuse content