Nestle posted higher-than-expected sales growth in the first three months of the year after good momentum in the United States and China, putting it on track to meet its goal of more than 3 per cent organic growth this year.
The world’s biggest food group, with brands such as Maggi soup and KitKat bars, said its biggest markets, the US and China, had shown a strong trend in the quarter, with the largest contributions from pet care, dairy and infant nutrition.
Nestle and its peers are trying to buck a consumer trend towards fresh, locally produced foods, which has hit sales of packaged goods, by focusing on fast-growing categories like infant formula and coffee.
The company based in Vevey in western Switzerland said organic or self-generated sales growth accelerated to 3.4 per cent in the first quarter, ahead of the average 2.8 per cent in an Infront Data poll of analysts and 2.8 per cent a year ago.
“Our increased speed, innovation for a changing world and execution focus are clearly paying off,” Chief Executive Mark Schneider said in a statement on Thursday. “We confirm our outlook for the year.”
Nestle also said efforts to gear its portfolio more toward health and wellness, and fix or dispose of underperforming brands, were on track.
It expects strategic reviews of its skin health and Herta meats businesses to be completed by mid- and late-2019 respectively.
Sales volume growth held up well in the quarter and pricing improved, thanks to price increases in Brazil and the United States, Nestle said.
China maintained mid-single-digit growth thanks notably to premium infant formula and Nescafe.
Acquisitions of a license to sell Starbucks coffee and of Atrium Innovations, which are not included in organic growth, helped increase overall sales to 22.2 billion Swiss francs or 22 billion dollars.
Vontobel analyst Jean-Philippe Bertschy said the statement had shown measures taken last year were starting to pay off, and said growth expectations would go up.
He renewed his “buy” recommendation on the stock.
Nestle shares, which have already gained over 19 per cent this year, were indicated to open 1.4 per cent higher, according to Julius Baer pre-market data.
French yogurt maker Danone posted underlying quarterly sales growth of 0.8 per cent on Wednesday, hit by setbacks in China and Morocco, but said it expected sales growth to accelerate from the second quarter.
Anglo-Dutch Unilever said on Thursday underlying sales grew 3.1 per cent in the first quarter.
Johan Utterman, who manages a fund for Lombard Odier IM, said he thought Schneider was doing a good job.
“Divesting lower-growth; lower-margin, lower-return-on- invested-capital businesses and buying higher ones. So I think it’s all heading in the right direction,” Utterman said.
Are You Addicted To Your Phone, Internet? Try This!
Many people spend hours on the internet every week — but some people can’t pull away. For individuals with internet...
Economy: Stop Peddling Fake News Against CBN Gov, Group Warns
An Abuja based pro-democracy group dedicated to advocating for integrity, justice, probity and transparency in public offices, Global Integrity Crusade...
Abuja Housing Show: US Housing Expert To Address Housing Issues
Mr Festus Adebayo, convener of the 13th Abuja International Housing Show said the event has been fashioned to attract foreign...
Police Intercepts ‘Largest Ever’ Cache Of Explosives
Police in Hong Kong have seized what is thought to be the largest ever cache of high-powered explosives uncovered in...
Osinbajo, Okowa Nominated For Leadership Awards
Vice President Yemi Osinbajo and Gov. Ifeanyi Okowa of Delta are to be given Niger Delta Leadership Awards 2018 by...
Rape: Police Invite Bisola, Timi Dakolo For Questioning
The Police on Sunday confirmed that its operatives had served official invitation letters on Bisola and Timi Dakolo over the...
NNPC Records N6.33b Trade Surplus In May – Report
The Nigerian National Petroleum Corporation (NNPC) said it recorded a trade surplus of N6.33 billon for the month of May,...
OPINION13 hours ago
Presidential Election Petition Tribunal: The Chasing Shadow Moves Of Atiku Abubakar And PDP
COVER STORIES11 hours ago
Rights Commission Wades Into Sen Abbo’s Alleged Abduction Of Wife
FEATURES12 hours ago
Longest-Serving African Female Presidents
POLITICS23 hours ago
Party Registration Should Be Full Time Job For Another Body – INEC
FEATURES8 hours ago
Brewing War Of Camps In Bayelsa PDP
NEWS20 hours ago
Police Identify Lagos Airport Intruder As Nigerien
NEWS10 hours ago
Calls For National Security Summit Diversionary – Falana
POLITICS17 hours ago
Gov Bello Is The Real Progenitor Of Rescue Mission In Kogi – Fanwo