Published: Thu, October 19, 2017
Money | By Armando Alvarado

Unilever third-quarter sales hit by poor weather and hurricanes

Unilever third-quarter sales hit by poor weather and hurricanes

Along with Nelson Peltz, recently rebuffed in a bid for a board seat at Procter & Gamble, they're pressuring food and personal-care giants to lift profit margins and revamp slow-growing portfolios as consumers seek niche brands and fresh food rather than packaged products.

Unilever reported lower-than-expected third-quarter sales, losing market share to smaller competitors and dampening hopes that an aborted takeover offer from Kraft Heinz would spark a swift improvement.

Paul Polman, chief executive officer, Unilever, said India volume growth had improved after GST implementation and that price growth lowered in Q3 as the benefits of the tax change were passed on to consumers.

Shares in the company fell by 191.5p, or 4.2pc, to £43.57 after Unilever blamed its lacklustre growth on natural disasters in the U.S. and Mexico, poor weather in Europe and growing competition from local ice cream competitors nibbling away at sales of its Magnum and Ben & Jerry's ice creams. Analysts had expected underlying sales growth of 3.9%.

Nestle too saw its Asia, Oceania and sub-Saharan African region, which includes markets such as India and China, report 5.3% organic sales growth for the September quarter, the highest of its three key zones.

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Nestle is headquartered in Vevey, Switzerland, and Unilever in Rotterdam and London.

Underlying sales increased by 2.6%, driven by emerging markets growth of 6.3%, while developed markets decreased by 2.3%.

"The developed markets were extremely challenging", with retailers canceling orders after hurricanes hit Florida and Texas, Unilever's second- and third-largest states for revenue in the USA, he said. Performance in North America was down by 2.9% and performance in Europe was down by 1.6%. It's also moving to sell its under-performing spreads business. With this included, sales rose 2.8%.

Unilever, which owns more than 400 household brands including Dove, Knorr soups, Lipton, Magnum and Marmite, said in a statement that sales were down 1.6 per cent to 13.2 billion euros in the period from July to September. "We're fixing some of the under-performers and clearly cranking up the rate of innovation".

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