Unilever hurt by falling prices

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Unilever missed second-quarter sales expectations yesterday, citing a slowdown in emerging markets and declining prices in developed ones.

The Anglo-Dutch maker of Ben & Jerry’s ice cream, Dove soap and Lipton tea said underlying sales – which exclude the impact of foreign exchange, acquisitions and disposals – rose 3.8 per cent, below analysts’ expectations of 4.3 per cent.

“Overall there’s a slowdown in Asia,” chief financial officer Jean-Marc Huet said, citing China and Vietnam in particular. “Russia has been difficult, you can imagine why.”

For the first half of the year, core earnings per share rose 2 per cent to 0.78 euros, handily beating analysts’ estimates for a 2.6 per cent decline.

But sales volume, measuring the amount of products sold, rose only 1.9 per cent against the 2.4 per cent gain forecast by analysts and 1.9 per cent in the first quarter.

“The absence of quarter-on-quarter acceleration is disappointing,” said RBC Capital Markets analyst James Edwardes Jones, especially since a later Easter holiday should have lifted sales in the second quarter at the expense of the first.

Pricing also rose 1.9 per cent but in developed markets it fell 1.4 per cent owing to intense competition from rivals and weak consumer spending in North America and northern Europe.