VEVEY, Switzerland — Food giant Nestlé reported a decline in sales in the first quarter of 2024, as the company hiked prices, consumer demand remained weak, particularly in North America, and supply-chain disruptions continued to hold back volumes. However, the management confirms its targets for the current year. The Swiss multinational company said Thursday that organic sales rose 1.4% in the first-quarter – with pricing accounting for 3.4% and real internal growth (RIG) of -2.0% – missing a company-compiled consensus of +2.9%.
Sales were of CHF 22.1 billion, a decrease of 5.9% over the equivalent period of 2023 (CHF 23.5 billion). Foreign exchange decreased sales by 6.7%. Net divestitures had a negative impact of 0.6%.
Overall, organic sales growth for the Group was driven by Europe and emerging markets, with a negative impact from North America.
Coffee delivered low single-digit growth, with continued momentum for Nescafé, Nespresso and Starbucks.
In Zone North America, the beverages category posted a sales decrease, as robust growth for Starbucks, Nescafé and Seattle’s Best was more than offset by negative growth for Coffee mate with a high base of comparison in the prior year.
Sales of coffee for Zone Europe grew at a mid single-digit rate, with strong contributions by Nescafé and Starbucks products.
In Zone Asia, Oceania and Africa, coffee delivered mid single-digit growth, with continued robust demand for Nescafé.
Coffee posted sales decreases in Zone Latin America, following a high base of comparison in 2023.
Zone Greater China saw market share gains in soluble coffee. Coffee delivered mid-single digit growth, driven by Nescafé ready-to-drink offerings.
Reported sales in Nespresso decreased by 4.1% to CHF 1.5 billion from CHF 1.6 bn last year
Organic growth was 1.0%, with pricing of 1.2%. RIG was -0.2%, impacted by the phasing of commercial activities. Foreign exchange negatively impacted sales by 5.1%. By geography, sales in North America grew at a mid single-digit rate, with market share gains. Europe posted slightly negative growth.
Growth was driven by the Vertuo system, which continued to generate broad-based momentum. Growth in out-of-home channels was also robust, fueled by further adoption of the Momento system. Innovation continued to resonate with consumers, based on new limited editions, particularly Pierre Hermé and Maple Pecan.
Nestlé: Outlook
Nestlé ‘s full-year 2024 outlook is confirmed: “we expect organic sales growth of around 4% and a moderate increase in the underlying trading operating profit margin. Underlying earnings per share in constant currency is expected to increase between 6% and 10%,” said the company in the statement.
