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Unilever Sales Dragged Down by Truckers' Strike in Brazil

Thomas Buckley
Trucks remain parked on May 28, 2018 in the port of Santos near Sao Paulo -- the largest in Latin America -- on the eighth day of a strike to protest rising fuel costs in Brazil. - A truckers' strike paralyzing fuel and food deliveries across Brazil entered an eighth day Monday but with hopes of relief after unpopular President Michel Temer caved in to the strikers' key demand. Road blockages by truckers remained in place across 21 of the country's 27 states, G1 news site reported. (Photo by Miguel SCHINCARIOL / AFP) (Photo credit should read MIGUEL SCHINCARIOL/AFP/Getty Images) Photographer: MIGUEL SCHINCARIOL/AFP

Unilever is still feeling the effect of a strike in Brazil that held back sales growth globally in the latest quarter.

The maker of Ben & Jerry’s ice cream and Dove soap on Thursday reported sales growth below analysts’ expectations, citing the effects of a labor dispute in the Latin American country, where truckers walked off the job earlier this year to protest rising fuel prices. The London- and Rotterdam-based company was unable to lift prices enough to make up for the setback.

Unilever said underlying sales grew 1.9 percent in the second quarter, compared with the 2.2 percent median estimate of analysts surveyed by Bloomberg. Growth slowed from the first quarter’s 3.4 percent uptick after strikes in Brazil disrupted the company’s supply chain. Sales growth was reduced by six tenths of a percentage point in the first half because of the strike.

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Unilever had previously given a muted outlook for sales growth in the first half, saying it would be below the range of 3 percent to 5 percent it expects to achieve in the full year. The company is also grappling with investor dissent as it consolidates its headquarters in the Netherlands, making its inclusion in the U.K.’s benchmark FTSE 100 stock index “extremely unlikely,” Unilever has said.

Underlying sales exclude acquisitions, divestments and currency fluctuations.

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