Stocks

Unilever Ticks Up Despite Sales Miss On India and China Slowdown

Unilever’s stock ticked up on Thursday despite the consumer goods giant missing sales estimates.

Unilever’s stock ticked up on Thursday despite the consumer goods giant missing sales estimates.

Unilever’s stock ticked up on Thursday despite the consumer goods giant missing sales estimates.

The Anglo-Dutch conglomerate said sales were impacted by a slowdown in India and China, while the Ben & Jerry’s owner also reported lower ice cream sales.

The London-listed stock climbed 1.7% in early trading.

The back story. The stock has faltered recently, falling more than 13% since the end of September as investors have been concerned about the company’s growth prospects.

The Dove and TRESemmé owner has prioritised emerging markets, which has been a strong driver of growth in recent quarters.

Developed markets growth has been weaker, with ice cream sales suffering due to the weather and a competitive battleground for hair care in the U.S.

What’s new. Unilever reported sales of €13.25 billion ($14.64 billion) in the third quarter, up from €12.53 billion a year earlier.

Underlying sales rose 2.9% in the third quarter, below analysts’ estimates of 3%.

Developed market sales fell 0.1%, as the company continued to struggle in Europe.

Sales were also dented by a slowdown in growth in India and China two key emerging markets, which has been a priority for the company since Alan Jope replaced Paul Polman as chief executive last year.

Ice cream sales were hit by a cooler summer in Europe, while tea sales also slowed in developed markets.

Emerging markets sales growth overall was 5.1% led by South East Asian markets, while home care product also drove the sales rise.

Despite missing estimates, Unilever stuck to full-year sales growth guidance in the lower half of 3-5%.

Looking ahead. The share price may have fallen considerably in recent weeks, but an underwhelming, uninspiring set of results is unlikely to provide a major stock boost.

Investor fears that top-line momentum has stalled are unlikely to be eased, despite a third quarter performance largely in line with expectations.

Jope promised to “step-up competitive top line performance” following the results, but investors remain unconvinced for now.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.