Nestle Q1 growth beats expectations thanks to strong price increases
ZURICH (Reuters) -Food group Nestle on Thursday confirmed its margin and sales growth targets for 2022 after strong price increases to counter cost inflation helped organic sales rise more than expected in the first quarter.
Organic sales, which strip out currency swings, acquisitions and divestments, were up 7.6%, more than a 5.0% average forecast in a company-compiled consensus, helped by strong price increases of 5.2%, the maker of KitKat chocolate bars said in a statement.
“Cost inflation continues to increase sharply, which will require further pricing and mitigating actions over the course of the year,” said the company also known for Nescafe instant coffee.
The group based in Vevey on Lake Geneva confirmed it expects organic sales to rise by around 5% this year, with a trading operating profit margin between 17% and 17.5%.
It said pet care and coffee performed best in the first quarter and that its organic growth figure did not include the Russian market, where the group has suspended the sale of most of its products.
Peer Danone kept its financial goals unchanged on Wednesday after like-for-like sales rose 7.1% in the first quarter, beating expectations.
Nestle group sales reached 22.2 billion Swiss francs, versus a 21.7-billion-franc estimate in the poll.
(Reporting by Silke Koltrowitz, Editing by Miranda Murray)