23 July 2026
If you are covering Nestle’s latest results, please see the following comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
“Despite reporting a relatively solid set of numbers, Nestle’s shares have fallen by around 6% this morning, which seems a slightly harsh reaction given performance was broadly in line with expectations.
“Organic sales growth of 3.7% is a respectable outcome for a food business, with growth accelerating modestly from the first quarter and coming in slightly ahead of forecasts. However, investors may have hoped for stronger volume growth than the 1.8% achieved. Pricing contributed 2.1% to growth, reflecting the ongoing impact of higher coffee and cocoa costs, and was marginally ahead of expectations.
“Management largely reiterated its outlook, maintaining guidance for 3-4% organic sales growth. However, the tone was a little more cautious. Nestle is up against a difficult consumer environment, where balancing volume growth with pricing remains a challenge. The impact of the infant formula recall has also weighed on sales, but it is beginning to ease and should provide some support in the second half of the year.
“The decision to create a joint venture for its waters and premium beverages business with Platinum Equity should allow Nestle’s management to sharpen its focus on its higher-growth core categories such as coffee, confectionery and pet care. Management also indicated it is considering the sale of its joint venture in ice cream, effectively mirroring Unilever’s recent move.
“Ultimately, the food industry is a difficult place to be but Nestle continues to navigate those challenges better than most of its peers. At 18 times earnings, it is not the most expensive stock, but earnings growth remains modest when viewed in Swiss franc terms. The stock had enjoyed a decent run up ahead of the results, so today’s weakness looks more like a reversal of recent gains than a sign of anything more fundamental.”
