Nestle cuts full-year sales outlook

25th Jul 2024 13:02

(Sharecast News) - Food giant Nestle slumped on Thursday after it cut its sales outlook for the year as pricing has come down "faster than expected".

In its first-half results, the company said it now expects full-year 2024 organic sales growth of at least 3%, down from previous guidance of 4%.

For the first half, Nestle reported organic revenue growth of 2.1%, and total reported sales of CHF45bn, down 2.7%.

Net profit was flat at CHF5.6bn but the net profit margin increased by 30 basis points to 12.5% on a reported basis and by 40 basis points at constant currency. As a result, earnings per share rose 1.8% to CHF2.16 on a reported basis.

Chief executive Mark Schneider said: "Positive real internal growth is back. We delivered improved volume and mix growth across the group in the second quarter. Nestlé Health Science is recovering as planned and is set for a strong second half.

"Looking ahead to the remainder of the year, we will continue to drive RIG by launching innovations that address consumer trends and growing our large iconic brands. At the same time, we have seen pricing come down faster than expected. Therefore, we consider it prudent to adjust our guidance for the year, with organic sales growth now expected to be at least 3%."

At 1355 BST, the shares were down 4.9% at CHF88.94.