16 October 2025
If you are covering Nestle’s latest financial results and its announcement it will cut 16,000 jobs, please find below a comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
“The new Nestle CEO has used today’s results to indicate that despite his history as a career Nestle employee, it will not be business as usual. Philipp Navratil has committed himself to the existing strategy aimed at improving execution and operating performance, and the reduction of 16,000 jobs indicates he will happily take drastic action to arrest Nestle’s slide.
“This cost cutting programme aims to save the business €3bn by the end 2027. Management have grand ambitions to bring Nestle back to where it has historically been, but for now the company is a work in progress. Nestle's third quarter sales grew 4.3% on an organic basis beating market expectations by 0.6%. This is a short-term positive and investors will be reassured about what it means for the medium term prospects for the business.
“Most of the growth was due to inflationary factors, with pricing up 2.8% as the company recovers higher coffee and cocoa costs – both were the top performers for Nestle this quarter. Meanwhile, emerging markets (up 5.2%) outpaced developed ones (up 2.1%) but this was largely due to inflationary pricing in some EM's - DM growth showed a better balance. Sales in the Asia and Europe exceeded expectations with the Americas broadly in line. In the latter the North American consumer remains subdued, while China remained weak but this was offset elsewhere in the region.
“Full year guidance has been reaffirmed so we should see ongoing sales growth improvement with an operating margin of 16% or better. The shares trade at a discount to the wider sector and this reflects the turnaround story the business is on. A few more quarters like this one may just help complete that story and put the company back on a trajectory of high quality growth.”
