Nestle sales outlook brightens after strong first half
By Richa Naidu
LONDON (Reuters) -Nestle improved its full-year organic sales outlook and reported better-than-expected first-half organic sales, as the world's biggest packaged food company again raised prices to cope with higher input costs.
Nestle said it is narrowing its full-year organic sales growth guidance — which does not include the impact of currency movements and acquisitions — to a range of 7%-8% from a range of 6-8%.
«You always leave yourself some downside protection and, personally, I expect the organic growth more in the range of 7.5%-8%,» CEO Mark Schneider said on a call with journalists.
Shares in Nestle were up nearly 2% on Thursday morning in premarket trade.
The Swiss company, which makes Kit Kat chocolate wafer bars and Nescafe coffee, said organic sales during the period rose 8.7%, beating the average estimate for 8.1% growth, according to a company-provided analyst consensus.
Nestle's 9.5% price increases were ahead of the average analyst estimate of 8.7%. Real internal growth — or sales volumes — fell 0.8% versus expectations of a 0.6% decline.
«For the remainder of the year, we are confident that we will deliver a positive combination of volume and mix, an improvement in gross margin and a significant increase in marketing investments,» Schneider said.
«We're still repairing our gross margin,» he added. «Pricing action will moderate. It will also be a lot more targeted to products that are still subject to input cost inflation.»
The consumer goods company is one of many — from Unilever (NYSE:UL) to P&G — that have in the past two years struggled to manage high costs of everything from sunflower oil to packaging. Their problems began with the Covid-19 pandemic and unusual weather patterns
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