Anglo-Dutch consumer goods company Unilever has cut its 2004 earnings guidance by forecasting its leading brands' performance in the third quarter will be below that of the second.
Unilever now expects low single-digit earnings per share growth in full-year 2004 after previously saying it expected low double-digit growth, it said in a statement today.
The owner of brands such as Hellman's mayonnaise and Lipton ice tea said it would step up its marketing efforts to boost sales, at a time of price wars in several key European markets.
Financial analysts had already cast doubt on what they called Unilever's ambitious earnings target after second-quarter results disappointed in July.
"In light of the lower sales and a weaker category mix, we expect gross margin to decline in the third quarter compared to last year. EPS in the third quarter is now expected to be lower than the comparable quarter last year," the group added.
Unilever said trading in July and August was below expectations. It also noted substantially lower sales of ice cream and ready-to-drink tea due to very poor weather in Northern Europe, continued weak consumer confidence and a retail price war in the home and personal care markets in Western Europe.
The company also said that in Asia, competition remained intense in the laundry and hair care markets of key countries.