NESTLÉ reported half-year sales growth below analysts’ forecast on Thursday and lowered its full-year organic sales growth outlook to at least 3 percent from about 4 percent previously.
The world’s biggest packaged food company said prices had come down faster than expected, prompting it to change its outlook.
The maker of KitKat bars, Nespresso coffee and Maggi seasoning managed to increase its volumes amid worries that price hikes would alienate shoppers.
Price hikes across the sector have moderated after years of spiking prices to preserve profits. Companies from Unilever to Nestlé have flagged they will prioritize regaining lost sales volumes after cost-conscious consumers turned to cheaper brands.
Nestlé’s real internal growth, a sales volume metric, grew 0.1 percent in the first half of 2024, while analysts expected it to shrink by 0.5 percent.
The Swiss company again hiked its prices by 2 percent, less than the 3 percent expected by analysts, marking a continued slowdown in price hikes.
Nestlé’s organic sales rose 2.1 percent in the first half of 2024, below the average estimate of 2.5-percent growth in a company-provided consensus.
Its underlying trading operating profit was 7.8 billion Swiss francs ($8.84 billion), coming in line with the 7.81 billion francs seen in the company-provided consensus of 20 analysts.
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