Unilever’s Q3 falls short of estimates
LONDON: Unilever reported third-quarter sales growth that fell well short of estimates as poor weather in Europe and hurricanes in the Americas cut demand for ice cream.
Underlying revenue rose 2.6 per cent, said the Anglo-Dutch maker of Magnum and Ben & Jerry’s , compared with the four percent median estimate of analysts surveyed by Bloomberg.
“The developed markets were extremely challenging”, with retailers cancelling orders after hurricanes hit Florida and Texas, Unilever ’s second- and thirdlargest states for revenue in the United States, said chief financial officer Graeme Pitkethly.
In Europe, ice cream was the main source of volume decline, it said in a statement.
In addition to bad weather, new competition hit Unilever in ice cream. The company lost market share to a new entrant, Halo Top, though US ice cream sales should be back in growth next year, said Pitkethly.
Unilever ’s refreshment business, which includes ice cream and tea, accounts for about onefifth of overall sales. The company has maintained its commitment to spend between €1 billion and €3 billion (RM5 billion and RM14.77 billion) annually on fastgrowing businesses such as teamaker Pukka Herbs and Sir Kensington’s condiments, even after Kraft Heinz Co’s unsuccessful US$143 billion (RM603.68 billion) takeover bid in February.
Underlying sales in North America were down 2.9 per cent, but it said China and India showed signs of improvement.
To pursue growth in emerging markets, which accounts for two-thirds of sales, Unilever agreed to acquire cosmetics maker Carver Korea for US$2.7 billion. Bloomberg