Multi-brand owner Unilever lowers sales guidance

By

Sandra Halliday

Published
Dec 17, 2019

Even the strongest, most diversified businesses are feeling the heat at the moment and on Tuesday Anglo-Dutch consumer products giant Unilever downgraded its sales guidance.

The owner of the Dove, Hourglass, Lynx, Dermalogica, Toni & Guy and more brands wasn't reacting to tough conditions in its domestic UK market, but tougher times elsewhere. 

The company said that it has seen challenges in the latest quarter in some markets, including the economic slowdown in South Asia, which is one of its largest business regions. In addition to this, trading conditions in West Africa have been difficult.

That might have been okay, but it seems that the trading environment in the developed markets where it’s also strong continue to be challenging and it said that while there are early signs of improving performance in North America, a full recovery there will take time.

So what does this mean in terms of its sales? The company said that it now expects underlying sales growth for 2019 to be “slightly below its guidance of the lower half of its 3% to 5% multi-year range”.

That didn't exactly give us much detail and we don't know what exactly ‘slightly below’ means. We also don't know which areas of the company's business are suffering in particular, or whether it's all areas equally. The group makes a very broad range of products including food and drink, household items and beauty/personal care. This latter category is its biggest operating division and so we have to assume that it will be feeling some of the pain.

CEO Alan Jope said: "Due to challenges in certain markets, we expect a slight miss to our full-year underlying sales growth delivery. Looking ahead to 2020, growth will be second-half-weighted. While we expect improvement in H1 2020 versus this quarter, we expect that first-half growth will be below 3%. Our full-year underlying sales growth is expected to be in the lower half of the multi-year range. Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance."