Unilever, the Rotterdam- and London-based company reported its slowest revenue growth during the third quarter in the past five years as personal care its major growth engine sputtered amidst a sharp fall off in China.
Underlying sales for the Surf and Rin detergent maker were up 2.1% for the quarter sending its stock lower.
The estimates for analysts were an increase in sales of 3.9%
China sales plummeted by 20% as many large retailers in China ran down their inventories of products made by Unilever that were worth $126 million, said Jean Marc Huet its finance chief.
The deceleration in China weighed down the emerging markets, which represent 57% of the revenue at the company.
Shares at Unilever fell by up to 3.8% and in Amsterdam were lower by 2.1% at midday.
Difficulties in China lowered the underlying sales at the Dove body wash maker, by 0.8%.
China’s backlog in inventory will continue for the fourth quarter and be nearly complete by the end of 2015.
Total volume at Unilever was up 0.3%, its slowest advance in more than three years.
Much of the underlying sales increase has come from increases in price across Latin America. Revenue taking that basis excludes divestments, acquisitions as well as currency shifts.
Unilever’s misery also spread outside of China. Revenue across Europe dropped by 4.3%, which was a decline not seen even during the most recent recession.
Deflation across the entire continent hurt sales and poor weather kept many consumers from purchasing ice cream made by Unilever.
The company responded through less expensive products such as Cornettos for 1 euro in Spain.
North America returned to growth as an improvement in conditions was seen.
Over the last year, Unilever has jettisoned brands such as Ragu and Slim-Fast.
Analysts are now wondering if the poor performance by Unilever will be the same for Proctor & Gamble its rival, which will report results on Friday.
