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Unilever Lowers Sales Target For 2020 As Asian Economies Slow Down

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Unilever Lowers Sales Target For 2020 As Asian Economies Slow Down

London-based Unilever plc (NYSE: UL) on Tuesday lowered its sales growth expectations for the year 2019.

What Happened

The British-Dutch consumer goods maker said that it now expects sales growth to be between the lower half of its previous forecast range of three to five percent.

Unilever said that the grim outlook comes from the challenges it is facing due to the economic slowdown in South Asia, worsened trading conditions in West Africa, and its reduced sales in developed markets.

What's Next

The company similarly reduced its outlook for the first half of 2020.

"Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in [the first] 2020 versus this quarter, we expect that first half growth will be below 3%," Unilever's CEO Alan Jope said in a statement.

"Our full year underlying sales growth is expected to be in the lower half of the multi-year range."

Primary Markets Affected

Unilever noted a 0.1% drop in its quarter three sales in developed countries, as reported by Reuters. In comparison, the company reported a 5.1% increase in sales in emerging markets.

The company's sales in developed countries are flat as more people turn to fresher foods, niche brands or are otherwise just cutting back on spending, according to Reuters.

One of its most important emerging markets, India, is seeing a major economic slowdown, even as the country continues to grapple with large scale protests over the government's actions in Kashmir and Assam.

Moody's Corporation (NYSE: MCO) said that India's worsening economy has led to the weakening of consumption in the country, the Economic Times reported.

Another major market for Unilever, Pakistan's economy is similarly affected as the country faces trade sanctions from India over the Kashmir dispute, The Nikkei Asian Review reported last week.

Price Action

Unilever's shares traded 5.17% lower early morning at the London Stock Exchange on Tuesday. London's FTSE index, of which Unilever is a part, dropped by 0.034%.

 

Related Articles (MCO + UL)

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