Ben & Jerry’s supplier Unilever (ULVR) leaves a sour taste with investors as the packaged consumer goods colossus says underlying sales were weaker in the fourth quarter of 2016.
Sales growth in emerging markets slowed to 4.6% in Unilever's final quarter, dragging full year underlying sales growth back to 3.7%.
Investors were clearly expecting more from the big brands behemoth behind Marmite, Dove and Lipton, as shares in the blue chip fall 4.5% to £31.98.
In October, we flagged sales growth at the consumer goods behemoth after its brief spat with Tesco (TSCO) over the pricing of Marmite and PG Tips, which prompted a sell-off in the stock.
Operating profit grew 3.8% to €7.8bn last year, but volatile currency movements dragged turnover 1% lower to €52.7bn.
CEO Paul Polman says tough market conditions made Unilever's last quarter challenging and he expects a slow start to 2017 with better growth throughout the year.
Liberum analyst Robert Waldschmidt is a seller of Unilever, noting Q4 organic sales growth of 2.2% missed his expectations of 3.2%, and believes investors can gain better value elsewhere.
He forecasts an average organic sales growth of 4% between 2017 and 2019 as its European division will continue to act as a ‘deflationary cap’ on Unilever’s growth in the future.
