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MILAN — Nestlé posted better-than-expected first-quarter sales despite weakness in some markets and confirmed its full-year outlook. The Swiss multinational – which is also the world’s biggest coffee company- offset lower volumes with price increases. Total reported sales increased by 2.3% to 22.6 billion Swiss francs ($27.28 billion), slightly ahead of analyst expectations of 22.5 billion francs.
Nestle’s organic sales growth, which excludes the impact of currency movements and acquisitions, rose 2.8% in the first quarter ending March 31, Nestle said. Analysts had forecast average organic sales growth of 2.5%.
In the first three months of the year, Nestlé increased its prices by 2.1% in response to higher raw material prices for coffee and cocoa, with “limited customer disruption”.
By category, confectionery (+8.9%) and coffee (+5.1%) were the largest organic growth contributors. This growth was pricing-led, with double-digit increases in some markets. “The focus in these two categories is on smart pricing action to fully address input cost increases where possible, while maintaining medium-term consumer penetration,” said the company.
“Where larger price changes were implemented, in some cases we saw a pronounced initial impact on RIG, which is easing as consumer behavior and the competitive environment adjust and stabilize” said the company. “Outside confectionery and coffee, organic growth was more modest, but RIG was positive across all other reported categories.”
By geography, all regions contributed to positive organic growth. In developed markets, organic growth was 1.6%, driven by RIG of 1.4% along with positive pricing. In emerging markets, organic growth was 4.5%, driven by pricing of 4.8%, with RIG slightly negative.
By channel, organic growth in retail sales was 2.5%. Organic growth of out-of-home channels was 6.6%. E-commerce sales grew organically by 15.1%, reaching 20.1% of total Group sales.
The company announced the roll-out of innovation ‘big bets’ on track including Nescafé Espresso Concentrate.
The Swiss company maintained its 2025 outlook, saying it still expects organic sales growth to improve and estimates an underlying trading operating profit margin at, or above, 16%.
Laurent Freixe, Nestlé CEO commented: ” Growth was broad-based across markets and categories, with improving market share trends across many businesses, particularly our billionaire brands.”
“Performance in the first quarter was in line with our expectations, and our 2025 guidance remains unchanged. This is based on our assessment of the direct impact of current tariffs and our ability to adapt. The indirect impacts – on consumers and customers, as well as currencies and commodity prices – remain unclear at this stage.
Overall, the situation continues to be dynamic, with heightened risks and uncertainty. Our 277,000 committed colleagues are focused on successfully executing our strategy: driving efficiencies and investing for growth to accelerate our categories and improve market share.”
“(Big areas) that are impacted are, of course, our water business coming into the U.S., and espresso capsules and some of our ingredients,” Nestle’s finance chief Anna Manz said on a call with journalists.
Nestle has previously said more than 95% of its U.S. sales are manufactured locally, reports Reuters
Nestlé: Coffee performance by geographic areas
In Zone Americas, beverages (including coffee and coffee creamers) delivered mid single-digit growth, with growth momentum for Nescafé, more than offsetting a sales decrease in Coffee mate.
Coffee posted low single-digit growth in Zone Asia, Oceania and Africa, driven by Nescafé soluble and ready-to-drink offerings.
In Zone Europe, coffee posted low single-digit growth, with solid growth in Starbucks products partially offset by slower growth for Nescafé soluble as we took action on pricing.
Nespresso
Nespresso delivered good growth, with positive RIG, while the company also began to increase pricing. North America delivered double-digit growth and further market share gains, and in Europe, the rate of market share losses slowed. Performance in the quarter benefited from some pull forward of demand ahead of price increases, which took effect towards the end of the quarter.
Segment performance summary
- Organic growth was 5.7%, with 2.6% RIG and 3.2% pricing.
- Reported sales increased by 6.1% to CHF 1.6 billion (US$1.93 billion), including a -0.1% impact from foreign currency and a 0.4% benefit from net acquisitions.
- Market share in North America continued to increase, while the brand slowed the share losses in Europe.
Key organic sales growth drivers
- By geography, sales in North America grew at a double-digit rate, while Europe posted positive growth.
- By system, growth was driven by the Vertuo system, with strong sales momentum across all geographies. Sales for out-of-home channels grew at a high single-digit rate, backed by the Momento system.
