Nestle misses sales estimates as price hikes deter shoppers
By Richa Naidu
LONDON (Reuters) — Nestle reported full-year organic sales growth slightly below expectations on Thursday as the world's biggest packaged food company continued to hike prices, prompting some shoppers to turn to competing brands.
Shares fell more than 4% in early London trade to hit their lowest in almost four years.
Investors worry the world's biggest packaged food company will struggle to woo customers back to its top-selling products like KitKat chocolate bars and Nescafe coffee even as it slows the pace of price increases this year.
The Swiss firm also said it expects organic sales growth of around 4% in 2024, and a «moderate increase» in its underlying trading operating profit (UTOP) margin. The 2023 UTOP margin was 17.3%, up by 40 basis points in constant currency.
Organic sales, which exclude the impact of currency movements and acquisitions, rose 7.2% in the year ended Dec. 31, the company said. Analysts had on average expected organic sales growth of 7.4%.
«Nestle finishes the year on a disappointing note,» Bernstein analyst Bruno Monteyne said.
«Guidance for 2024 organic growth of 4.0% is below current consensus of 4.9% and guidance for a moderate margin increase may put pressure on the current (margin) consensus of 17.7%.»
However, Nestle's net profit rose sharply by about 20% to 11.2 billion Swiss francs ($12.76 billion).
The packaged goods industry has for more than two years hit shoppers with higher prices, citing higher input costs that started with the COVID-19 pandemic and were exacerbated by Russia's invasion of Ukraine.
Everything from sunflower oil to freight has become more expensive, taking a toll on global supply chains.
This quarter however companies have said 2024 prices will
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