23 April 2026
If you are covering Nestle’s Q1 update, please see the following comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
“Nestle has delivered a strong start to the year, with first quarter organic sales growth of 3.5% comfortably ahead of market expectations. It is encouraging to see that volumes and mix improved, while pricing continued to reflect the need to absorb higher coffee and cocoa costs, suggesting demand has remained resilient despite a tougher consumer backdrop.
“Geographically, sales growth was higher in emerging economies than developed. Emerging markets strength was widespread, aside from the notable weakness in China following inventory corrections and the infant formula recall. Developed markets performed better than expected, however, with Europe in particular showing good momentum. By category, coffee continues to stand out, achieving volume growth even as prices rise, while pet care, food and snacks also delivered steady progress. The impact of the infant formula recall weighed on group sales in the quarter, with a 90bps impact, but sales are expected to recover by the end of the year.
“Against a backdrop of ongoing uncertainty in the Middle East, management has chosen to leave full year guidance unchanged. The emphasis remains on accelerating volumes through the year and improving margins into the second half, with 2026 positioned as a transition year ahead of a return to the group’s medium term targets.
“Nestle’s valuation remains supportive, with the shares trading at a discount to the wider sector versus its usual premium to peers. While the business is still very much a work in progress, management is expected deliver on its longer term ambitions.”
