Nestle has booked a drop in first-quarter reported sales as the top line was dented by currency headwinds that more than offset organic growth due to the strength of the Swiss franc.
Total sales fell 5.1% in the three months to the end of March, the Swiss food giant revealed today (15 April). Currency exchange had a negative impact of 8.6%.
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However Nestle said its organic sales performance was in line with expectations. The company booked organic sales growth of 4.2%, beating consensus expectations of 4%.
The top line was driven by volume growth. Real internal growth, Nestle’s internal measure that strips out the impact of pricing, rose 2.6%.
Growth was also weighted to emerging markets, where revenue increased 8.5%. In developed markets, such as the US and Europe, sales increased just 0.3%.
Nestle reaffirmed its full-year forecast of “around 5%” organic growth in the 12 months, with an improvement in margin and underlying EPS at constant exchange rates.
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By GlobalDataCommenting on the result, Sanford C. Bernstein analyst Andrew Wood said: “Despite the slower start to the year on the top line, we believe that this reiterated guidance gives comfort that our expected positive operating momentum is likely to build throughout 2014. Before the reporting we expected +5.1% organic growth, +25bps of margin growth and +4% EPS growth (+10% in constant FX) for FY 2014 and we would not expect to make any significant revisions from here.”
