Unilever hit by the emerging-market sell-off
Sliding emerging-market currencies have hit the growth targets of consumer goods giant Unilever.
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.
What the commentators said
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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
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".
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
UK-US trade deal announced: US cuts tariffs on UK car imports to 10%
Keir Starmer and Donald Trump have announced a UK-US trade deal, but the US president has refused to lift baseline tariffs on most UK goods. What does it mean for the UK?
-
How to use mid-caps to diversify from the US
Medium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.
-
Inflation is hurting Unilever, but investors shouldn’t give up just yet
Analysis Consumer goods group Unilever has been underperforming as inflation bites. It's made errors in the past, says Rupert Hargreaves, but with valuable brands and a global reach, it still has plenty going for it.
-
Why GSK should turn down Unilever’s billions
News Unilever has offered GSK £50bn for its consumer division. But while the cash will be a temptation, the deal is not in the interests of shareholders or of anyone else, says Matthew Lynn.
-
Unilever slides and GSK bounces after GSK knocks back £50bn bid
News Unilever shares fell to their lowest level in around five years, after its £50bn takeover bid for GSK’s consumer health unit was rejected.
-
Unilever puts the U in U-turn
Features The Anglo-Dutch consumer-products giant irritated shareholders with plans to redomicile in Rotterdam. Now it has beaten a retreat. Marina Gerner reports.
-
Unilever and the erosion of shareholder democracy
Features The way Unilever went about planning the vote on moving its head office out of the UK wasn’t normal and it wasn’t right, says Merry Somerset Webb.
-
Unilever leaves Britain
Features Consumer-goods giant Unilever has chosen Rotterdam over London for its unified headquarters. Takeover threats and taxes played a part. Alice Gråhns reports.
-
Unilever should snub the “crazy cost-cutters”
Features Unilever could soon dispose of some of its best-known brands in a bid to appease shareholders. But should it listen to them?
-
Unilever sees off Kraft
Features US food giant Kraft, which swallowed up Britain’s Cadbury in 2010, has failed – for now – to do the same to Unilever. Ben Judge reports.