Unilever's first profit warning in years is more a wake-up call for investors than a cause for strategic soul-searching in the boardroom.
International consumer goods companies have come to be seen as safe places for investors to park cash while they wait for QE distortions and the eurozone crisis to clear. The thinking has been straightforward: you can't go far wrong with a decent dividend and exposure to emerging markets, source of more than half Unilever's sales these days.
The problem is that too many people were making the same bet.
In May Unilever's share price hit £28.50, a gain of 35% in a year and putting the stock on a sky-high rating of 21 times expected earnings. That left little room for error in the thesis that branded goods companies with double-digit profit margins are bullet-proof.
An emerging markets hiccup has duly arrived, prompted in part by the currency shake-out that accompanied the US Federal Reserve's flirtation with a QE taper. Across the group, Unilever's sales growth is running at 3-3.5%, not the 5% seen earlier in the year, let alone the 6.9% achieved in 2012.
Emerging markets, it seems, are not currently the perfect offset to flat and falling developed markets.
The open question, of course, is what happens when the Fed actually commits to ending QE, as opposed to talking about it and then delaying it. But it's a question for investors rather than Unilever's management. The latter should concentrate on the day job of flogging soaps, hairspray and mayonnaise and not be deflected by a slowdown in India, Indonesia and Brazil.
The former should wonder whether the current share price of £23.50 is still too high. Some 18 times earnings still seems punchy for a company that may now produce only negligible growth in earnings this year.
guardian.co.uk © Guardian News and Media Limited 2010
image: © uzi978