Unilever faces its worst sales for a decade

Shares fall 7pc as Marmite owner misses targets

The owner of Marmite and Dove soap yesterday said it will miss its annual sales targets – sending its shares plummeting sharply.

Unilever, the 11th largest company in the FTSe 100 index and a staple of UK pension funds, said sales growth for 2019 would come in below its 3pc to 5pc range.

The guidance suggests the final three months of the year will be the worst quarter for Unilever in more than a decade.

Shares fell 7.2pc or 331.5p to 4229p, wiping billions of pounds off its value.

The slump will be felt by savers with money tied up in Unilever through their pensions, ISAs and other investments.

Russ Mould, investment director at AJ Bell, said: ‘even a bucket of Domestos couldn’t clean up the stink created by Unilever’s trading update.’

The consumer goods giant said that its trading woes will continue into next summer amid a slowdown in its key international markets.

Trading in Nigeria and India – important markets for its stable of major brands – has been slow.

Despite early signs of improved trading in North America, it warned that a full recovery there ‘will take time’.

There is also set to be little let-up in the woes at the start of the next financial year, with Unilever cautioning that first-half growth will be lower than 4pc.

But it is hoping for a pick-up in the second half of next year, which would keep annual sales growth within the lower half its guidance. The group said the 2019 sales miss will not affect margins or full-year earnings. But the assurance did not assure the market. Last night nine analysts had ‘buy’ or ‘strong buy’ recommendations on Unilever shares, and three were advising investors to sell.

The numbers will pile pressure on the new boss Alan Jope (pictured), who took over in January, amid concerns the company’s growth is stagnating as millennials ditch established brands.

The company, which also owns Marmite, Magnum ice cream and hellmann’s, insisted that the issues were macroeconomic, blaming south Asia, west Africa and North America.

Domestic demand in rural India, where Unilever is strong, is particularly poor because of a crackdown on non-bank lending and rising unemployment.

Unilever did not say which of its individual brands was being hit.

They include more than 45 UK household names such as Pot Noodle, Domestos, Lipton, Lynx, Persil, Toni and Guy hairdresser’s, Cif, Radox, Vaseline, Sure, Surf and PG Tips.

Jope insisted he was making sales growth a ‘top priority’.

he said: ‘Due to challenges in certain markets, we expect a slight miss to our full-year underlying sales growth delivery.

‘We are confident we have the right strategy and investment in place to step up our performance. We’re not panicked by where we find ourselves right now.’

earlier this year he had said he did not feel he was under ‘pressure externally’, but yesterday some questioned his decision to cut marketing spending to maintain margin, as competitors increase theirs.

Jope has presided over a muted summer, caused by issues in its international markets and weak demand for ice cream due to a cooler summer in europe.