Nestlé (NSRGY, Financials) has reported a 2.4% decline in sales for the first nine months of 2024, citing foreign exchange impacts and divestitures as key factors in the drop. With real internal growth at 0.5% mostly driven by weaker consumer demand and attempts to lower customer inventories in the third quarter, the firm achieved 2% organic growth notwithstanding the reduction. Following notable rises over the preceding two years, pricing—which accounted 1.6% of growth—kept normalizing.
Given a lower demand situation and further inventory cuts projected in the fourth quarter, Nestlé has changed its whole-year projection. The firm now projects an underlying trading operating profit margin of around 17% and organic sales growth of about 2%. Projected to stay steady is earnings per share, in constant currency.
Though total sales falls in both areas, regionally North America showed negative organic growth of -0.3% while Europe witnessed 3.3% organic growth. Though they reported a drop in overall sales, Asia, Oceania, and Africa achieved 3.6% organic increase. Though both areas had little natural increase, Latin America and Greater China both experienced declining sales.
Product categories had conflicting performance. Supported by companies like Nescafé, Starbucks, and Nespresso, coffee remained the key driver to growth. Leading by Purina and KitKat respectively, pet care and confectionary also witnessed expansion. Dairy and frozen foods, however, showed negative growth; dairy was affected by declining demand for coffee creamers other ambient products, while frozen foods faced more competition in North America.
