Unilever reported lower-than-expected third-quarter sales, losing market share to smaller competitors and dampening hopes that an aborted takeover offer from Kraft Heinz would spark a swift improvement.
Underlying sales rose only 2.6 percent, Unilever said on Thursday. That was below the 3.9 percent growth expected by analysts in a company-supplied consensus, and below the 3 percent seen in the first half of the year.
Unilever's shares were down 4 percent, having risen by about a third since Kraft's unsuccessful $143 billion takeover bid for the maker of Magnum ice cream and Dove soap in February.
The company blamed poor weather in Europe, hurricanes in the United States, and earthquakes in Mexico for disrupting its sales. But it also cited the growing threat from local competitors in markets such as U.S. ice cream and Southeast Asian personal care.
Unilever lifted its profitability target in July and there was some concern that lower spending on marketing was having a negative impact on sales.
"Our competitiveness has dropped off a little," Chief Financial Officer Graeme Pitkethly said. The company is only gaining market share in about half of its business, he said, down from about 60 percent in previous years.
Swiss rival Nestle <NESN.S> reported accelerated third-quarter sales on Thursday, but said increased restructuring costs would weigh on margins.
"Life is becoming more difficult for the consumer goods giants, as competition from smaller, nimbler players intensifies and consumer preferences shift toward niche and alternative brands," said Charlie Higgins, fund manager at Hargreaves Lansdown, which owns Unilever shares.
"To succeed in the long term Unilever will need to adapt its business model, becoming more agile and responsive to changing trends."