Unilever revised its 2003 sales growth estimates due to competition in the U.S. laundry and personal care market and a weak consumer goods market internationally.
Company executives said sales of its leading brands are expected to grow only 3% in the second quarter and 4% for the entire year. In response to the news, the company’s stock sank 11%.
Previously, investors trusted in Unilever’s Path to Growth agenda, a five-year restructuring plan the company introduced in 1999. According to the Path to Growth plan, Unilever’s brands would get a boost from 2% to 4-6% this year and in 2004, with operating margins over 16%.
In the process, Unilever has sold low-growth businesses and acquired new segments, including Bestfoods, SlimFast and Ben & Jerry’s ice cream.
“We have yet to convince the market about the sustainability of our im-proved performance,” said Howard Green, investor relations chief, in response to the news that Unilever’s stock had gone down. “That continues to be our challenge.”