Too Hot or Too Wet, Europe’s Consumer Giants See Weather Hit

(Bloomberg) -- Just as a second summer heat wave grips Europe, companies across the region are lining up to blame soggy weather earlier in the year for hitting their performance.

Unilever said Thursday that a wet spring in Europe and North America crimped demand for ice cream brands like Ben & Jerry’s and Magnum. Danone said rains held back bottled-water sales, while Anheuser-Busch InBev NV said poor weather reduced Americans’ thirst for beer despite a strong performance elsewhere.

The consumer-goods giants’ reports came as Europe braced for a scorcher, with the U.K.’s Met Office saying temperatures could set records Thursday across southern England while Meteo France forecast highs exceeding 40 degrees Celsius (104 degrees Fahrenheit) for Paris.

“It has not escaped me, the irony of speaking to you about poor weather in Europe on the hottest day on record in the U.K.,” Unilever Chief Executive Officer Alan Jope said on a call with analysts.

It’s the second major heatwave of the summer in Europe, following an earlier bout in late June that was also accompanied by a round of downbeat reports from companies lamenting the earlier rains. This month, U.K. apparel chain Superdry Plc, known for its outerwear, blamed unseasonably warm weather for flat sales.

Just as the heat wave is expected to ease later this week, the latest weather citations in financial updates may have a limited effect on results.

Solid Results

AB InBev, for example, reported robust overall results, with earnings rising more than analysts expected in the second quarter as volume gained the most in more than five years. The stock advanced as much as 4.7% in Brussels.

At Unilever, sales growth was slightly below analysts’ expectations, though higher prices in the company’s home-care division that sells Omo detergents compensated for some of the weakness in ice cream sales. Its shares fell as much as 1.7% in London.

Danone’s weakness in bottled water was offset by a rebound in baby-food sales in the key market of China, and second-quarter revenue growth topped analysts’ estimates. Its shares gained as much as 1.1% in Paris.

While Europe has seen a radical shift from the dreary weather that held back sales of some consumer treats earlier in the year, anyone expecting a big rebound may be disappointed as hot, dry summers become the norm.

Danone Chief Financial Officer Cecile Cabanis said water sales will be weighted toward the end of the year. “The third quarter was exceptional last year, so even if we have good weather, last year it was the same,” she said on a call.

To contact the reporters on this story: Thomas Buckley in London at tbuckley25@bloomberg.net;Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Marthe Fourcade

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