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Why did Unilever report lower than expected sales in the second quarter?


Leon Mathias

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Unilever Plc. (LON:ULVR) announced a weaker than expected underlying sales growth in the second quarter, citing wet weather in Europe and weaker food inflation in India. The company’s underlying sales of 3.5% in Q2 2019 came in lower than analysts’ average estimates of 3.7%. Growth was mainly seen in emerging markets like Indonesia and the Philippines with sales surging 7.4% in the three months to 30th June, while in developed markets they fell 1.6% in the quarter.

With ice cream making up about 13% of Unilever’s sales and Europe generally contributing to around a third of the total revenue in the second quarter, the group saw a slide in its turnover as a result of wet weather across the continent, with rainfall amplifying to three times the norm in April and May across most of Europe denting demand for the firm’s premier product.

The company, however, maintained that its full-year sales forecast would come in at the lower half of the 3-5% range with operating margin likely to hit 20% in 2020.

At 2.30pm GMT, shares of Unilever were trading more than 2% lower at 4,890p while the FTSE 100 was down about half a per cent at 7,466.

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