Unilever's sales growth hurt as emerging markets slow

LONDON: Unilever, the world’s second-biggest consumer-goods maker, reported quarterly sales that missed estimates and said growth is slowing in emerging markets while conditions remain difficult in the US and Europe.

So-called underlying revenue rose 5% in the second quarter, the Anglo-Dutch maker of Lipton tea said on Thursday in a statement. That fell short of the average estimate of 14 analysts polled by Bloomberg for a 5.3% increase.

Sales in developing markets rose 10.3% in the second quarter, the company said, little changed from the pace of the first three months. Chief executive officer Paul Polman said on a conference call that it’s not “realistic” for growth to remain at those levels after nine straight quarter of double-digit gains, given the tougher economic conditions.

“Slowing does not mean crashing,” Andrew Wood, an analyst at Sanford C Bernstein, said in a note. “Despite slowing emerging markets, Unilever still delivered double-digit growth, which was basically in-line with the first quarter.”

“Growth is slowing in emerging markets, as macroeconomic headwinds influence consumer behaviour,” the company said in a statement.

Slackening Growth

Slackening economic growth in nations such as India and China is a concern to Unilever, which gets about 57% of sales from developing regions. While sales growth was strong in Latin America, Africa and Southeast Asia, south Asia was “a little less so,” Chief financial officer Jean-Marc Huet said.