Shares in Nestle spark after full-year numbers beat forecasts

Shares in KitKat-owner Nestle sparked on Thursday, after sales at the Swiss food giant came in narrowly ahead of forecasts.

The firm, which also owns Nespresso, Haagen-Dazs and Purina pet food, among others, said real internal growth - its proxy for sales volumes - rose by 0.8%, compared to a 0.3% fall a year previously.

Analysts had been expecting RIG of 0.7%.

Prices, meanwhile, increased 1.5%, ahead of consensus for 1.4%. Prices soared 7.5% a year earlier.

Group sales fell 1.8% to €91.4bn, while underlying trading operating profits declined 2.2% to €15.7bn. Underlying earnings per share fell 0.8%, to €4.77.

Looking to the current year, Nestle reiterated is forecast for 2025 organic sales coming in above 2024. But it also warned that the underlying trading operating profit margin would be around 16%, down on the 17.2% seen in 2024.

Nestle has been hit by soaring costs in recent years, including notably higher prices for key commodities such as cocoa and coffee. It hiked prices in response, but that dented consumer demand and hit sales.

New chief executive Laurent Frexie is therefore looking to bolster volumes and restore investor confidence. He has already shaken up the company’s organisation by reducing its regional markets to just three core zones.

He said on Thursday: "In a challenging macroeconomic context and soft consumer environment, we achieved a solid performance in 2024.

"We have a clear roadmap to accelerate performance and transform for the future. Increasing investment to drive growth is central to our plan.

"From 2025 we expect our actions to drive an improvement in organic sales growth, with a lower underlying trading operating profit margin in the short term as we invest for growth."

As at 1000 GMT, the Swiss stock was trading 6% higher.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "While North America faced a bit of rough patch, Europe and Latin America were cooking with gas, serving up impressive growth thanks to smart pricing and savvy cost-saving moves.

"However, 2025 is shaping up to be a bit of a tricky year, as soft consumer spending in the US and Europe could stir up challenges, along with rising costs and a heavier focus on promotions and marketing."