Anglo-Dutch consumer products giant Unilever has issued an unexpected profit warning, after trading in July and August fell below expectations.
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The company said it now expects low single digit earnings per share growth (BEIA) for the full year 2004. Earnings per share (BEIA) in the third quarter are now expected to be lower than the comparable quarter last year.
Unilever said that in July/August it had substantially lower sales of ice cream and ready to drink tea due to very poor weather in Northern Europe.
The company expects the development of leading brands in Q3 to be below that seen in Q2. It has planned additional support for Q4 behind high quality market place initiatives.
“In the light of the poor July/August and the pressure on some of our market positions we do not consider it in the long term interest of the business to maintain our previous (low double digit) EPS guidance for 2004. We are stepping up our market place activity, including putting additional A&P funds behind a number of high priority market place initiatives,” said Unilever chairmen Antony Burgmans and Niall FitzGerald.
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By GlobalData“Top line growth is key to long term sustainable value creation, and here the recent performance is unacceptable. We are determined to put this right and we are therefore moving forward with the simplification of our operations and, most importantly, increasing investment behind our brands,” they added.
