Unilever share price drops as quarterly sales disappoint

on Oct 23, 2014
Updated: Oct 21, 2019

iNVEZZ.com, Thursday, October 23: Shares in Unilever (LON:ULRV) have shed nearly four percent in London this morning after the maker of Dove soap and Lipton tea posted a weaker-than-expected sales growth in the third quarter amid a sharp market slowdown in China.

As of 08:55 BST, Unilever’s share price had lost 3.59 percent to 2,443.00p.
**Sales growth slows**
Unilever said in a statement this morning that its underlying sales had increased 2.1 percent in the third quarter, with the result falling short of the 3.9 percent forecast of Bloomberg-polled analysts. Underlying sales volume growth rose only 0.3 percent, with Reuters reporting that analysts had expected growth of 1.8 percent.

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Commenting on Unilever’s performance, chief executive Paul Polman said that the underlying sales growth reflected “competitive performance in markets which weakened further as macro-economic conditions continued to put pressure on consumers”.
“Market growth slowed in emerging countries and particularly in China where we also experienced substantial trade de-stocking,” he added.

Today’s results come after Unilever’s finance chief Jean-Marc Huet last month warned that market growth had slowed to less than two percent, from 2.5 percent in the first half of the year and four percent last year. ()

The London and Rotterdam-based company’s turnover dropped two percent to €12.2 billion (£9.6 billion) including a negative currency impact of 2.6 percent.
“This was an unimpressive quarter from Unilever, where we had thought the stars were nicely aligned,” Bloomberg quoted James Edwardes Jones, an analyst at RBC Europe, as commenting in a note entitled “Ooof.” Sales in China were “notably poor,” he added.

Unilever said that it was “confident” that it would “achieve another year of profitable volume growth,” while noting that it did not expect any material improvement in its markets for the remainder of the year.
**Analysts on Unilever**
As of October 17, the consensus forecast amongst 29 polled investment analysts covering Unilever for the Financial Times suggests that investors should hold their position in the company. The 14 analysts offering 12-month price targets for the FTSE 100 consumer goods company have a median target of 2,702.78p, with a high estimate of 3,116p and a low estimate of 2,120p.
**As of 09:17 BST, buy Unilever shares at 2476.00p.**
**As of 09:17 BST, sell Unilever shares at 2475.00p.**


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