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BUZZ-FX pain hits European consumer staples hard
April 24, 2014 / 2:26 PM / 4 years ago

BUZZ-FX pain hits European consumer staples hard

(Fixes formatting) Unilever is one of the biggest FTSE 100 fallers - down 1.8% despite beating expectations on underlying sales - and showing that consumer staple companies are likely to keep feeling the pinch from painful FX moves.

** Unilever suffered an 8.9% hit from FX effects, bigger than analysts had expected, and said FX rates should reduce sales growth by about 5-6% in 2014, with a slightly higher impact on profit.

** Unilever’s caution echoes that of beverage giant Diageo , which said the FX impact on full-year profit would be enough to wipe out 2/3 of 2013’s organic sales growth.

** Companies with hefty EM sales exposure are under particular scrutiny this earnings season.

** Over the past 90 days, full-year revenue estimates on STOXX Europe 600 consumer staples have been trimmed 2.6% vs 2.3% for the overall index, according to Thomson Reuters StarMine data -- one reason consumer staples has the third lowest analyst revisions score of all STOXX sectors.

** Others CS earnings coming up: AB Inbev May 7 (guidance cut 3.2% in the last 30 days), Carlsberg also May 7 and Beiersdorf on May 8, the latter two having seen full-year earnings downgrades.

** Chart on consumer staples sector performance vs STOXX 600 YTD: link.reuters.com/gum78v (RM: alistair.smout.thomsonreuters.com@reuters.net)

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