LONDON — UNILEVER, the world’s second-biggest consumer-goods maker, on Thursday reported quarterly sales that missed estimates and said growth is slowing in emerging markets.
CEO Paul Polman said after the results announcement the recovery in the US was not helping everyone, and consumer spending "is still flat". Mr Polman’s comments were reflected in a 2% decline in North American underlying sales in the quarter.
So-called underlying revenue rose 5% in the second quarter, the Anglo-Dutch maker of Lipton tea said. That fell short of the average estimate of 14 analysts for a 5.3% increase.
Slower growth in countries such as India is a concern to Unilever, which has been relying on developing markets to combat declining consumer demand in recession-hit Europe. The MSCI Emerging Markets index, a barometer of developing economies, has fallen 6.2% over the past three months, with the likes of Nestlé and Coca-Cola citing weakness in newer markets.
"Growth is slowing in emerging markets, as macroeconomic headwinds influence consumer behaviour," Unilever said on Thursday. "Within this trend we see a mixed picture across the major countries reflecting different local circumstances. Developed markets remain sluggish with little sign of any recovery in North America or Europe."
Unilever fell 0.8% to €30.70 at 9.03am in Amsterdam trading, trimming this year’s gain to 6.5%.
Underlying sales in developing markets rose 10.3% in the second quarter, the company said, little changed from the first-quarter’s 10.4% increase.
While sales growth was strong in South America, Africa and southeast Asia, south Asia was "a little less so", chief financial officer Jean-Marc Huet said.
Earlier this month, Unilever spent €2.45bn to boost its holding in its Indian subsidiary to 67% from 52%. Hindustan Unilever is due to report first-quarter earnings on Friday.
Coca-Cola said this month that profit fell for a second straight quarter as sales were hit by economic weakness in China, unseasonable weather in places such as India, and muted consumer spending in Brazil. Nestlé also saw emerging-market growth slow down.