By Nestle, the Swiss food and beverage major, is set to release its first-half results for 2023 on July 27. Let’s take a look at the details:
Sales Forecast
According to a company-compiled consensus estimate, Nestle’s sales are expected to reach 46.68 billion Swiss francs ($54.37 billion) in the first half of the year. This is compared to 45.58 billion Swiss francs in the same period last year.
Net Profit Forecast
Analysts predict that Nestle’s net profit for the first half of 2023 will be approximately 5.88 billion Swiss francs, as per the consensus estimate. This is an increase from the previous year’s net profit of 5.25 billion Swiss francs.
Key Factors to Watch
Organic Sales Growth
In the first half, analysts expect Nestle’s sales to grow organically by 8.1%, remaining stable compared to the previous year. The consensus estimate also suggests that pricing growth will be around 8.7%.
Real Internal Growth
Analysts anticipate a real internal growth of minus 0.6%, indicating that a return to positive territory may be delayed until the second half of the year. Jefferies notes that Nestle has already adjusted expectations for negative real internal growth in the first half, citing reasons such as stock-keeping unit (SKU) rationalization and capacity constraints. The bank’s analysts believe that while the debate on this issue has temporarily eased, it is likely to resurface in the future.
U.S. Market Share
Nielsen data indicates that Nestle is experiencing market share losses in North America, specifically in cat and baby food categories, while gaining ground in frozen dinners and smaller categories. However, Nestle has challenged Nielsen’s representation, stating that the data does not capture pure-play e-commerce and that share losses in categories like pet and coffee creamers are a result of capacity constraints. This issue has been well-publicized, according to the analysts at Jefferies.
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