NESTLE Q1 SALES GROWTH HIGHER-THAN-EXPECTED
Swiss company says on track to meet goal on back of US, China momentum
NESTLE posted higherthan-expected sales growth in the first three months of the year after good momentum in the United States and China, putting it on track to meet its goal of more than three per cent organic growth this year.
The world’s biggest food company said its biggest markets, the US and China, had shown a strong trend in the quarter, with the largest contributions from pet care, dairy and infant nutrition.
Nestle and its peers are trying to buck a consumer trend towards fresh, locally produced foods, which has hit sales of packaged goods, by focusing on fastgrowing categories like infant formula and coffee.
The company said organic or self-generated sales growth accelerated to 3.4 per cent in the first quarter, ahead of the average 2.8 per cent in an Infront Data poll of analysts and 2.8 per cent a year ago.
“Our increased speed, innovation for a changing world and execution focus are clearly paying
off,” said chief executive officer Mark Schneider in a statement yesterday. “We confirm our outlook for the year.”
Nestle also said efforts to gear its portfolio more towards health and wellness, and fix or dispose of underperforming brands, were on track.
The Swiss company expects strategic reviews of its skin health and Herta meats businesses to be completed by the middle and later part of the year, respectively.
Sales volume growth held up well in the quarter and pricing improved, thanks to price increases in Brazil and the US, said Nestle.
China maintained mid singledigit growth thanks notably to premium infant formula and Nescafe.
Acquisitions of a licence to sell Starbucks coffee and of Atrium Innovations, which are not included in organic growth, helped raise overall sales to 22.2 billion Swiss francs (RM91.4 billion).