Unilever Plc will miss its underlying sales target this year, the consumer goods giant warned on December 17, sending shares in the maker of Dove soap and Ben & Jerry's ice cream into their steepest fall in six months.
In an unscheduled trading update, Anglo-Dutch Unilever also struck a downbeat tone on its prospects for meeting its mid-term target for sales growth of 3-5% next year.
"Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in H1 2020 versus this quarter, we expect that first half growth will be below 3%," Chief Executive Alan Jope said in a statement.
"Our full-year underlying sales growth is expected to be in the lower half of the multi-year range," added Jope, who took on the top job earlier this year.
Shares in Unilever were down 5.1% at 1025 GMT, while rival Nestle slipped 1.2%.
Unilever's forecast implies it suffered its lowest fourth-quarter sales growth in more than a decade, RBC analysts said.
Earnings, margins and cash are not expected to be impacted by the slower sales growth, the company said.
Developed economies have been a drag for Unilever for several quarters, where growing numbers of consumers are turning to fresher foods, niche brands or cutting back on spending.
Growth in South Asia - India, Bangladesh, Pakistan, Sri Lanka and Nepal - slowed to 5% this year, Jope said on a media call, marking a "significant deceleration" from last year's 10% rise.
Much of this was caused by a sharp slowdown in consumption in rural India, where growth for the first time is underperforming urban markets, Jope said.
India is Unilever's second-biggest market after the United States, contributing nearly 10% of its group revenue.
"When India takes a slowdown, we definitely feel it ...but this is more turbulent than normal," Jope said, adding that he expects the market to recover in the second half of 2020.
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