Nestle Q1 Sales Beat Expectations
Nestle Q1 sales beat forecasts as organic growth outpaced consensus, led by coffee, pet food and e-commerce, which could support flows into staples.
KEY TAKEAWAYS
- Organic growth was 3.5% with RIG 1.2% and pricing 2.3%, exceeding consensus.
- A January infant-formula recall shaved roughly 90 basis points from OG and RIG.
- Company kept FY organic-growth guidance above 3% and said margins will improve.
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Nestlé SA (NSRGF, NSRGY) reported Q1 sales on April 23, 2026 that exceeded forecasts as stronger demand for coffee and pet food under CEO Philipp Navratil's restructuring offset a January infant-formula recall and significant currency headwinds.
Sales Performance and Growth Drivers
Nestlé said in a press release on April 23, 2026 that reported sales for the quarter ended March 31 were CHF 21.3 billion, down 5.7% year over year from CHF 22.6 billion in the prior-year period. The figure surpassed the company-compiled analyst consensus.
Organic growth (OG) was 3.5%, consisting of real internal growth (RIG) of 1.2% and pricing gains of 2.3%, exceeding the consensus of 2.4%. RIG was positive across most regions and categories except for Nutrition’s infant-formula segment, which declined 3.5%.
Coffee and food & snacks led growth. Coffee, driven by Nescafé, Nespresso, and Starbucks partnerships, posted high-single-digit organic growth. Food & snacks, including confectionery such as KitKat, grew mid-single digits. Emerging markets excluding China expanded robustly, with 6.8% organic growth and 2.9% RIG.
E-commerce grew 15.4% organically, accounting for 21.5% of group sales. Petcare showed flat RIG despite strong pet-food demand supporting volumes.
Restructuring, Recall Impact, and Outlook
In January 2026, Nestlé initiated a global precautionary recall of certain infant-formula batches after traces of cereulide were linked to a supplier. The recall reduced Q1 organic growth and RIG by about 90 basis points. The company said product availability has since returned to normal.
Foreign-exchange translation subtracted 9.3% from reported sales, offsetting part of the underlying growth on a reported basis.
Under Navratil, Nestlé has focused investment and portfolio management on four categories: coffee, petcare, nutrition/health, and food & snacks. The company has cut about 16,000 jobs as part of this overhaul. Navratil said, "Our first-quarter performance demonstrates that our RIG-led growth strategy is delivering."
Management maintained full-year 2026 organic-growth guidance at above 3%, excluding foreign exchange and acquisitions. It also expects the underlying trading operating profit margin to improve over 2025, signaling confidence in the margin trajectory.
