Nestle Reports Solid Sales Growth In Q1 On Strong Pricing Growth Amid Inflation

Nestle ADR NSRGY reported Q1 2023 sales growth of 5.6% Y/Y to CHF23.5 billion, with a positive impact of 0.3% from net acquisitions.
Organic sales grew 9.3% Y/Y, led by strong pricing growth of 9.8%, reflecting higher cost inflation.
Organic sales came 2 percentage points above analysts' estimates, making this one of Nestle’s biggest beats in years, as per Bloomberg.
As per the report, the expectation-beating growth came amid a portfolio shakeup that was expected to weigh down short-term revenue growth. Nestle has been eliminating underperforming product lines to improve profitability in the long term.
The company increased pricing by around 10% across all geographies, expect China (+3.9%).
By product category, organic growth was led by Purina PetCare (+15.7% Y/Y) on solid momentum for science-based and premium brands Purina ONE, Purina Pro Plan and Friskies.
The results show resilience among big food and consumer-staples companies in the face of the highest inflation in decades: consumers appear to be accepting higher prices without big declines in volume, quoted Bloomberg.
As part of its portfolio restructuring initiative, Nestlé announced a joint venture with private equity firm PAI Partners for Nestlé’s frozen pizza business in Europe. The transaction is expected to close in the second half of 2023.
Outlook: The company reaffirmed guidance for organic sales growth at 6% - 8%, underlying trading operating profit margin at 17.0% - 17.5% and underlying EPS (in constant currency) growth at 6% - 10%.
Price Action: NSRGY shares are trading higher by 0.18% at $129.60 on the last check Tuesday.

Market News and Data brought to you by Benzinga APIs

Comments

Earnings Calendar

Never Miss Important Catalysts

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga