Unilever has warned it will miss its full-year revenue growth targets in a blow to the maker of Dove soaps and Magnum ice creams as it looks to escape a period of stagnant sales.
The company — one of the world’s largest consumer goods groups — has, like much of the industry, been seeking to reignite growth. But it said on Tuesday it expected underlying sales growth for 2019 to be “slightly below” 3 per cent. It had previously guided for growth in the lower half of its multiyear target of 3 to 5 per cent.
Growth will also be below 3 per cent in the first half of 2020. Full-year growth next year will be in the lower half of the 3 to 5 per cent range.
Alan Jope, chief executive, said: “Due to challenges in certain markets, we expect a slight miss to our full-year underlying sales growth delivery. Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance.”
Shares in the company fell 6 per cent in early trading in London, making it the worst performing stock on the FTSE 100.
The company blamed a host of factors for the warning, including an economic slowdown in south Asia — one of its biggest markets — and “difficult” trading conditions in west Africa. It also said trading in developed markets remained “challenging” and that while there were signs of improvement in North America, a recovery there would take time.
James Edwardes Jones, RBC analyst, said: “Unilever is squarely blaming its markets . . . we think there’s more to it than that.”
The announcement comes as a blow to Mr Jope who has faced pressure to reverse four years of slowing sales growth as Unilever struggles with challenges ranging from millennials ditching well-established brands to the growing popularity of new trends, such as veganism.
Mr Jope told the Financial Times earlier this year that he hoped sales growth would “start to edge . . . up” next year. “Whilst I’m working with a sense of urgency, I don’t feel a sense of pressure externally,” he said at the time.
Unilever said earnings, margin and cash were not expected to be affected by the revised sales guidance.