An electric-toothbrush-maker is the latest company to warn about the health of the Chinese economy
US-traded shares of Dutch consumer-electronics manufacturer Royal Philips slumped as much as 16% on Monday, driven by disappointing sales in China across product categories. It was the company’s biggest one-day decline since 2001.
Overall, comparable sales were flat, but sales of Philips’ personal-health products, such as electric toothbrushes, fell 5%, compared to a 7% growth in Q3 2023. The setback was “due to a double-digit decline in China, more than offsetting growth in other geographies.”
“Demand from hospitals and consumers in China further deteriorated, while we continued to see solid growth in other regions,” Philips CEO Roy Jakobs said. “China remains a fundamentally attractive growth market for Philips in the long term, with market conditions expected to remain uncertain.”
Philips expects comparable sales to grow by a modest 0.5% to 1.5% because of falling China demand, down from a previous forecast of 3% to 5%.
The health of Chinese consumers has weighed on corporate earnings for a slew of companies that sell consumer products. Luxury giants, such as LVMH and Gucci owner Kering, continued to see declining sales as demand in China slowed down. Beauty conglomerate L’Oreal similarly reported falling sales, dragging down competitors like Estée Lauder.
“Demand from hospitals and consumers in China further deteriorated, while we continued to see solid growth in other regions,” Philips CEO Roy Jakobs said. “China remains a fundamentally attractive growth market for Philips in the long term, with market conditions expected to remain uncertain.”
Philips expects comparable sales to grow by a modest 0.5% to 1.5% because of falling China demand, down from a previous forecast of 3% to 5%.
The health of Chinese consumers has weighed on corporate earnings for a slew of companies that sell consumer products. Luxury giants, such as LVMH and Gucci owner Kering, continued to see declining sales as demand in China slowed down. Beauty conglomerate L’Oreal similarly reported falling sales, dragging down competitors like Estée Lauder.
