Unilever's growth has been hit by poor weather and natural disasters

 
Courtney Goldsmith
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The consumer goods group said natural disasters hit sales growth (Source: Getty)

Unilever, which makes products like Marmite and Ben & Jerry's ice cream, said growth in the third quarter was hampered by natural disasters in the Americas and poor weather in Europe, causing the company's shares to slump.

In a third quarter trading update, the consumer goods giant said underlying sales growth of 2.6 per cent, which was down from three per cent growth in the first half of the year.

Excluding its spreads unit, which Unilever plans to sell, underlying sales growth was up 2.8 per cent.

Turnover during the quarter fell 1.6 per cent due to a 5.1 per cent hit from adverse currency movements.

Shares in the company fell 4.16 per cent to 4,359.5p in morning trading.

"Growth in the third quarter was adversely affected by poorer weather in Europe compared with last year and natural disasters in the Americas," said chief executive Paul Polman.

He added that the company has made "good progress" against its strategic objectives.

"The new organisation is delivering increased innovation speed and our savings programmes are allowing us to step up investment behind new growth opportunities. We expect to reap the benefits over the coming quarters."

He reiterated the company's full-year forecast of between three and five per cent sales growth.

Earlier this year, Unilever rebuffed a $143bn takeover bid from rival Kraft Heinz.

Charlie Huggins, manager of a Hargreaves Lansdown fund that holds Unilever, said:

Life is becoming more difficult for the consumer goods giants, as competition from smaller, nimbler players intensifies and consumer preferences shift towards niche and alternative brands.

Unilever has responded by cutting costs and raising prices, however, these are short term fixes. To succeed in the long term Unilever will need to adapt its business model, becoming more agile and responsive to changing trends.

However, he added that the firm is only at the start of a major cost-cutting programme, and in the long run, Unilever's significant exposure to areas like India and China will help growth.

Read more: Unilever buys ethical tea brand Pukka

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