Consumer goods giant Unilever warned on Tuesday, Dec. 17, that its sales prediction for 2019 may fall short due to the underlying sales issues in South Asia and in some major markets.
As a result of the slight miss in the sales prediction this year, the company lowered its 2020 expectation to 5 percent less than the original amount.
Chief executive Alan Jope said the decline in sales came after some challenges in the markets, affecting the full-year sales growth delivery. However, Jope claimed that the earnings, margins, and cash are not affected. “Our full-year underlying sales growth is expected to be in the lower half of the multi-year range,” added Jope.
The fourth quarter of the year posed a slowdown in sales particular in South Asia, as trading in developed markets continues. Full recovery on the sales growth will take some time, even though sales in North America improved.
The maker of Ben & Jerry’s ice cream said some of the factors of the sales decline include customers cutting on spending and turning to fresher goods. The market sales dropped by about 0.1 percent in contrast to the 5.1 percent rise in the emerging markets.
Weakened Consumption
Following North America, India is the second-biggest market in terms of sales for Unilever. There is a huge decline in sales due to weakened consumption and a sluggish job market. Urban areas dented spending rooted in irregular monsoons.
Pakistan, which is another major market for Unilever, faces trade sanctions that affected its economy. For this reason, there is weakened consumption among the people.
Because of the lowered sales prediction for 2020, the company’s shares traded 5.17 percent lower early Monday at the London Stock Exchange. The price index was down for 0.034 percent.
