Nestle beats quarterly sales estimates on sharp price hikes

Nestle (NESN.S) reported slightly better-than-expected first-quarter sales on Tuesday, as the world’s biggest packaged food company increased prices to offset tepid sales volume.

The Swiss company, which makes Maggi stock cubes, Kit Kat chocolate bars and Nescafe coffee, said sales rose 5.6% to 23.5 billion Swiss francs ($26.48 billion) in the quarter ended March 31, beating average estimate of 23.27 billion francs in a company-provided analyst consensus.

Nestle increased its prices by 9.8% during the quarter but sales volumes – which the company calls real internal growth – edged down 0.5%.

“Portfolio optimization efforts and responsible pricing helped to offset the ongoing pressures from two years of cost inflation,” Nestle CEO Mark Schneider said in a statement.

Consumer goods companies from Unilever (ULVR.L) to P&G (PG.N) have raised prices sharply for the last two years to battle rising commodities and supply chain costs that squeezed margins during the pandemic and only grew worse when Russia’s invasion of Ukraine sent energy expenses to record highs.

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