Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Coffee, dairy help Nestle post strongest quarter in a decade

Published 04/22/2021, 01:25 AM
Updated 04/22/2021, 02:25 AM
© Reuters. FILE PHOTO: Logo is pictured on the Nestle research center in Lausanne

© Reuters. FILE PHOTO: Logo is pictured on the Nestle research center in Lausanne

By Silke Koltrowitz

ZURICH (Reuters) -Nestle on Thursday posted its strongest quarterly sales growth in 10 years, citing stronger demand for coffee, dairy and petcare products.

The world's biggest food group has weathered the COVID-19 pandemic well so far as consumers locked up at home bought more packaged foods for themselves and their pets.

It also expanded ecommerce and its health science portfolio as consumers bought more online and worried about their health.

"Retail sales saw solid growth and out-of-home channels saw signs of improvement. We confirm our guidance for the year and our mid-term outlook for sustained mid single-digit organic growth," Chief Executive Mark Schneider said in the statement.

The maker of KitKat chocolate bars and Nescafe instant coffee expects an increase in organic sales growth this year versus the 3.6% achieved in 2020.

Organic sales rose 7.7% in the first quarter, versus 4.3% in the year-ago period, Nestle said, easily beating a forecast for 3.3% organic growth in a company-compiled consensus https://www.nestle.com/investors/analysts-consensus and a 3.3% drop in sales posted by peer Danone this week.

"What a blow out – the strongest quarterly number since 2011," Kepler Cheuvreux analyst Jon Cox said, pointing to a recovery in emerging markets, while Bernstein's Bruno Monteyne spoke of an "amazing beat".

Shares in Nestle, up just over 2% so far this year, were indicated to open 1.7% higher, according to pre-market indications by bank Julius Baer.

Organic growth stood at 7.2% in the Americas, at 4.4% in Europe and at 9.1% in Asia, Nestle said. Asia was in negative territory in the year-ago period as the pandemic hit there first.

In terms of categories, petcare was up 8.7%, powdered and liquid beverages including coffee rose 9.9%, and dairy increased 15.7%. Nutrition and health science fell 0.5%, dragged down by nutrition.

Nestle said it had made further progress on portfolio development as it wants to offer more health and wellness foods and get rid of underperforming businesses.

© Reuters. FILE PHOTO: Logo is pictured on the Nestle research center in Lausanne

It recently sold its North American water brands to One Rock Capital Partners for $4.3 billion and offloaded its Yinlu peanut milk business in China to Food Wise Co Ltd.

Peer Unilever (NYSE:UL) is due to post its first-quarter update on April 29.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.