Swiss food and beverage major Nestlé SA (NSRGY.PK,NSTR.L) reported Thursday a 5.7 percent drop in first-quarter total group sales with weak performance in all Zones, Nespresso, and Nestlé Waters & Premium Beverages. Group organic growth was 3.5 percent and real internal growth or RIG was 1.2 percent.
Looking ahead for fiscal 2026, the company continues to expect organic growth to be in the range of around 3 percent up to 4 percent, with RIG accelerating versus 2025, driven by the firm's focused growth plans.
The outlook confirmation reflects increased geopolitical uncertainty and macroeconomic risks.
In the first quarter, group sales were 21.32 billion Swiss francs, down from 22.60 billion francs a year ago.
Zone Americas sales fell 6.7 percent year-over-year to 9.11 billion francs, and Zone Asia, Oceania and Africa sales dropped 8.7 percent to 5.22 billion francs. Zone Europe sales were 4.62 billion francs, down 0.8 percent from last year.
However, all Zones and Globally Managed Businesses reported positive organic growth, with broad-based contributions. By product category, Coffee was the primary growth driver.
RIG was positive in all Zones and all categories except for infant formula within Nutrition.
In developed markets, organic growth was 2.8 percent, with RIG of 1.2 percent and pricing of 1.6 percent. In emerging markets, organic growth was 4.6 percent, with RIG of 1.2 percent and pricing of 3.4 percent.
For emerging markets excluding China, organic growth was 6.8 percent, split between RIG of 2.9 percent and pricing of 3.9 percent.
The company noted that overall impact of infant formula recall was approximately negative 90 basis points on first quarter organic growth was RIG. Product availability is now back to normal.
Philipp Navratil, Nestlé CEO, stated, "Results were strong across most Zones and categories, particularly in Coffee and Food & Snacks. Growth in emerging markets stood out. In Europe and the US our performance was robust as our teams successfully navigated the customer and consumer environments. Building on the momentum in the first quarter, we continue to execute our strategy to deliver a stronger Nestlé."
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