HLL issues sales warning

Hindustan Lever Ltd HLL said on Monday that the sales in the first quarter of the year 2002 will be below the corresponding period of last year. This is due to both external and internal factors. HLL has also discontinued traded exports in the March quarter. 8220;After a very good performance last year led by our strategy to focus on our Power Brands, we have had a slow start to this year. We will, however, deliver a reasonable growth in our operating profit for the quarter,8221; HLL chairman MS Banga said in a notice to the Bombay Stock Exchange.

He said that the company is determined to improve the profitability of its foods business just as it did for its beverages business last year. 8220;Consequently we are improving gross margins by focussing on our more profitable SKUs, stopping unprofitable ones etc.,8221; he added. Banga noted that on the external front the markets continue to be sluggish with several of HLL8217;s categories 8212; notably personal wash, laundry, tea 8212; continuing to show de-growth. This has also led the retail trade to bring down stock investments to reflect this, he said. 8220;We are taking several initiatives, which are resulting in a lower topline in the immediate term. We are also simultaneously investing in value added innovations. Secondly, we are moving to a new 8216;HLL way in sales8217;. We will now focus our salesforce only on driving secondary sales 8212; sales from our stockists to the retail trade. We are using IT to connect all our stockists to our supply chain so we can run a replenishment-based system,8221; he said. This rollout has led to a planned decrease in our stockists inventories with an adverse impact on the short-term topline.