Unilever Again Narrows Sales Forecast, Shares Dive 7%

21 October 2003

Anglo-Dutch consumer products giant Unilever on Monday cut its sales forecast for the third time in this fiscal, stunning investors and depressing its share price by seven per cent.

In a trading statement issued just eight days ahead of posting its full year results, Unilever reduced its growth forecast to 3%. This follows a statement in June that sales growth for key brands in 2003 would be about 4% - itself down on an earlier prediction of 5%-6%.

The Q3 decline is attributed to the waning popularity of Unilever's prestige fragrances, among them Calvin Klein and Eternity (down 25.8%), plus sagging sales of its Slim.Fast dieting range (minus 23.5%) as the company continued to suffer from a backlash against slimming products.

Summarized Investec analysts David Laing: "It’s obviously a very disappointing statement. It will be the third quarter running where sales are underdone. There was great momentum coming into the year, but that has been lost by the slowdown of two major brands, Prestige and Slim.Fast."

But no-one is yet jumping from top-storey windows. Underlying third-quarter earnings per share, before interest, exceptional items and amortisation, rose by some 12%.

Data sourced from: Times Online (UK); additional content by WARC staff