South Asia slowdown forces Unilever to lower sales growth forecast

CONSUMER goods giant Unilever Plc has said on Tuesday (17) that it expects sales growth in 2019 to be slightly below its prior estimates.

The business giant has blamed a slowdown in South Asia and weakness in North America for less than expected sales growth forecast.

Unilever said it now expects underlying sales growth for 2019 to be slightly below its previous guidance of sales coming in at the lower half of its 3 per cent to 5 per cent forecast range.

The company said in a statement: “This is a result of challenges in the quarter in some markets, including the economic slowdown in South Asia, one of Unilever’s largest markets, and trading conditions in West Africa remaining difficult.

“The trading environment in developed markets continues to be challenging and while there are early signs of improving performance in North America, a full recovery there will take time.”

The British-Dutch transnational consumer goods company said despite early signs of improving performance in North America, its biggest market, a full recovery would still take time.

Developed economies have been a drag for Unilever for several quarters, where growing numbers of consumers are turning to fresher foods, niche brands or cutting back on spending.

Alan Jope, chief executive officer at Unilever, 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 per cent. 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.”

In the company's latest quarterly results, sales in developed markets fell 0.1 per cent, in contrast to a 5.1 per cent rise in developing countries.

Earnings, margin and cash are unlikely to be affected, the company said in a statement.