Unilever has reported lower-than-expected Q3 sales, attributed in part to a slowdown in its two biggest emerging markets, China and India, as well as the failed recovery of its Latin American activity.
The Dove maker reported 2.9 percent organic sales growth, missing an average forecast of 3 percent. Meanwhile the company posted sales of €13.3bn, which beat expectations of €13.2bn.
Unilever has reported full year guidance of 3-4 percent sales growth with operating margins to reach 20 percent, up from 17.5 percent in 2018.
The beauty and personal care arm saw underlying sales growth of 2.8 percent, with deodorants performing well. Skin cleansing saw modest growth while skincare innovations such as Pond’s Glow Up cream, a hybrid product across skin care and makeup, reported a good performance. ‘Activations’ such as the extension of the Clear Men range into skin cleansing in China helped growth in the emerging markets while prestige brands such as Dermalogica, Hourglass and Living Proof continued to fare well.
The company stated, “Competitive intensity remained high in hair care, in particular in the US and China where we continue to focus on innovating and increasing market activity. This includes developing on-trend new formats such as Love Beauty and Planet’s shampoo and conditioner bars, which cater to consumer demand for reduced packaging.”
The lower-than-expected results follow new CEO Alan Jope’s focus on growth in countries such as Vietnam and Bangladesh through investment plans.
Talking to Reuters, Finance Chief Graeme Pitkethly said, “There have definitely been signs of slowing markets in India and China … In India, we are going from very high rates of market growth to growth rates in the mid-single digits of growth.”