(c) 2013, Bloomberg News.
(c) 2013, Bloomberg News.
LONDON — Unilever said sales growth slowed in the third quarter as the strengthening of the euro led to a further slowdown in emerging markets.
Underlying sales for the three months will rise 3 percent to 3.5 percent, the maker of Lipton tea and Dove soap said Monday in a statement after markets closed. That compares with 5 percent growth in both the first half and second quarter. The company repeated its goals for the full-year.
Unilever gets about 57 percent of sales from developing regions, making it susceptible to slackening economic growth in nations such as India and China. With about three-quarters of revenue coming from outside Europe, the company also has to contend with the strength of the euro, which is weighing on the likes of Adidas AG, Puma SE and Prada SpA.
"We are concerned that emerging markets will continue to be a drag across consumer staples for the next few quarters," said Alicia Forry, an analyst at Canaccord Genuity in London. "Our numbers will need to be adjusted," said Forry, who had estimated 4 percent growth in third-quarter underlying sales.
Unilever depositary receipts traded at the equivalent of 28.06 euros as of 1:15 p.m. in New York, down 2.4 percent on the Amsterdam closing price of 28.76 euros. Procter & Gamble Co., the world's largest consumer-goods company, declined 1 percent to $76.23 as of 1:15 p.m. in New York.
A slowdown in emerging markets has accelerated "as a result of significant currency weakening," Unilever said in the statement, released ahead of the London- and Rotterdam-based company's participation in investor conferences this week.
The euro has strengthened 5.5 percent this year, the best performer of the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
Unilever Chief Executive Officer Paul Polman has been discussing a slowdown in emerging markets for more than a year. In July, the CEO said it wasn't realistic to expect sales growth in those regions to be maintained after nine straight quarters of double-digit gains. Underlying sales in emerging markets rose 10.3 percent in the second quarter, little changed from the first three months of the year.
Developed markets remain "flat to down," Unilever said in Monday's statement. The company is due to report third-quarter sales figures Oct. 24.
"We continue to grow ahead of our markets and expect underlying sales growth to improve in quarter four," Polman said in Monday's statement. "For 2013, we are still on course to deliver against our priorities of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash flow."
Underlying sales excludes the impact of currency shifts, acquisitions and disposals.