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Global Consumer-Products Giant: ‘Really Tough out There’

What is it with these consumer-products companies that need to sell a lot of cheap stuff to a lot of consumers around the world? Over the last few days, one after the other reported what are more or less unvarnished quarterly revenue and earnings debacles.

At McDonald’s, global revenues fell 5% and net income plunged 30%. At Coca-Cola, international volume was up a measly 1%, but in the US, volume declined 1%. Revenues were down fractionally for the quarter and 2% year-to-date. Net income in the quarter dropped 14%. Revenues at third largest beer-giant Heineken, which brews its stuff in 70 countries, dropped 1.7%. People are scratching their heads: are consumers actually cutting back on beer? Other companies too have reported disappointing results.

On Thursday it was Unilever, the Anglo-Dutch giant maker of shampoos, deodorants, laundry detergents, ice cream… that warned in its quarterly report about what it looks like “out there,” not in the stock market, but in the real economy.

“It is really tough out there,” said CFO Jean-Marc Huët. “We have been at pains to say that for a long period of time.” Consumers are in trouble and are cutting back across key markets, leaving the company with price pressures and crummy sales.

Revenues fell 2%. “Underlying sales,” which are adjusted for a variety of things, rose 2.1%, but it was the worst growth since Q4 of crisis-year 2009, and down from 3.8% in the prior quarter.

Unilever warned of a slowdown in all the right places, in the emerging markets, in Europe, and of stagnation in the US. Like other consumer-products companies, it complained about currency issues, political unrest, bleak economies, the wrong kind of weather, and other uncertainties that perplex consumers to no end and cause them to get stingy.

“We expect markets to remain tough…,” CEO Paul Polman said.

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