Profit warning deals blow to Unilever share | RetailDetail

Profit warning deals blow to Unilever share

Profit warning deals blow to Unilever share

Dutch-British company Unilever has sent out a profit warning, as it predicts “a weakened growth in plenty of emerging countries” and a “flat to slightly lower” turnover in developed markets.

Slowdown in emerging countries

The owners of brands like Axe, Bertolli, Dove and Lipton expect the underlying sales growth in the third quarter to be a mere 3 to 3.5 %. The first six months saw an underlying sales growth of 5 % and analysts expected Unilever to maintain that number in the third quarter.

 

Unilever puts most of the blame for the failed target on the emerging countries, as they are experiencing a slower growth. The situation is worsened by the weakened local currencies compared to the euro. The developed Western markets will manage to hold onto a “flat or slightly lower turnover”.

 

Lowest exchange rate in 11 months

The profit warning is not a complete surprise, because Unilever had already mentioned in the second quarter that the market situation had worsened. However, investors were not pleased: the Unilever share dropped 3 % in Amsterdam, its lowest point in 11 months. London followed suit, dropping 3.6 %.

 

Unilever’s management points out that it is still on track to reach its previously mentioned goals for 2013: a volume growth and a durable improvement of the operational margins in its core activities. Paul Polman, CEO, expects an “underlying sales growth in the fourth quarter”.

Questions or comments? Please feel free to contact the editors


Are Chinese prisoners working for H&M and C&A?

20/02/2018

British former journalist Peter Humphrey has accused C&A and H&M of using forced labour. He claims to have seen how Shanghai prisoners were forced to work for Western chains, something the retailers will now investigate.

Chanel acquires stake in online retailer Farfetch

19/02/2018

French fashion label Chanel obtained a minority stake in British Farfetch. It wants to use the online retailer’s expertise to create more digital innovations for its own customers.

Monoprix wants to acquire web shop Sarenza

19/02/2018

Store chain Monoprix, part of French Groupe Casino, entered negotiations to acquire online shoe seller Sarenza, one of France’s prime online brands.

Zalando expands collaboration with German retailers

16/02/2018

Zalando has further expanded its collaboration with physical retailers in Germany. Shoe stores were already able to ship through Zalando and now clothes stores can too.

Kiabi opens largest Belgian store in Westland Shopping Center

15/02/2018

French clothing chain Kiabi will open its fifth Belgian store in the Westland Shopping Center in Anderlecht. This will become its largest Belgian store to date, spread across 1,800 sqm.

H&M warns for difficult 2018

15/02/2018

Swedish fashion group H&M warns that 2018 could be yet another difficult year for the company. It is working to improve online sales, but store turnover will most likely continue to drop.

Back to top