Unilever slumps as weak demand hits sales, growth

Bloomberg

Unilever slumped after Chief Executive Officer Alan Jope backed away from his predecessor’s growth targets as consumers around the world jilt mainstream brands.
The maker of Ben & Jerry’s ice cream and Dove soap said sales gains will be slightly below guidance for 2019 and in the lower half of its multiyear range of 3% to 5% in 2020.
The stock fell as much as 6.6% in Amsterdam on Tuesday, the steepest intraday decline in almost three years. Analysts at RBC Europe said the new outlook implies fourth-quarter growth will be the Anglo-Dutch company’s weakest for more than a decade.
Like other mainstream consumer-goods companies, Unilever has struggled to keep up with shoppers turning to niche and more local alternatives, as well as retailers’ own-brand products.
In the third quarter, the company cited disappointing sales of ice cream in Europe and black tea across the developing world as growth missed estimates. In its latest update, the company cited weakness in South Asia, West Africa and North America.
The slowdown follows a changing of the guard, with Jope succeeding Paul Polman at the start of the year and Chairman Marijn Dekkers announcing last month that he was stepping down to make way for Danish businessman Nils Andersen.
The cut to the forecast undermines Jope’s earlier decision to maintain his predecessor’s outlook. It also clouds his ambition to prove that companies that emphasize social purposes can outperform rivals that don’t.
The company had previously said that 2019 sales would be in the lower half of the muliyear range.
Unilever said the change to the outlook won’t affect profitability.