Shares in consumer goods giant Unilever slid by 4% this week after it lowered its sales growth targets for the three months to the end of September.
Revenue growth would now be 3%-3.5%, it said, rather than 4.5%-5%. It blamed "significant currency weakness" in emerging markets.
Multinationals suffer when weakened emerging-market currencies are translated back into the Western currency they report in, while buying raw materials locally becomes more expensive.
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Local consumers also take fright at the cost when buying imported goods, especially if the company has raised local prices to make up for the forex slide.
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The trend may not change soon. Emerging-market currencies could weaken further when US Federal Reserve tightening finally kicks in. Making up the slack elsewhere will be difficult, as revenue growth in developed markets has been very lacklustre.
Unilver's overall sales growth this year could be negative, reckoned James Edwards Jones of RBC Capital. Currency movements could trim it by 6%, and it has only averaged 5% a year in the past four years.
The lesson for investors "isn't to avoid emerging markets", said John Jannarone in The Wall Street Journal. Sales growth there will still outpace that of developed markets in the medium-term.
But when emerging-market currencies are caught in a sell-off, as they were this summer, investors in big multinationals should "pay attention rather than wait for companies to ring alarm bells".
