Nestle 1Q Organic Sales Growth Beat Expectations -- Earnings Review

By Giulia Petroni

Nestle SA on Friday reported sales for the first quarter of the year. Here's what we watched:

SALES: The Swiss food and beverage giant reported sales of 20.81 billion Swiss francs ($21.36 billion), down from CHF22.18 billion the previous year. Analysts had forecast sales at CHF21.10 billion, according to a company-compiled consensus.

Organic sales growth--a measure stripping out currency changes, acquisitions and divestments--rose 4.3%, beating analysts' estimates of 3%.

WHAT WE WATCHED:

-STOCKPILING: Strong organic sales growth was mainly driven by North America and Europe, as both regions benefited from consumers stockpiling in the face of state lockdowns. Prepared meals, pet food and coffee were among the largest growth contributors, helping outweigh sales declines in China.

-PORTFOLIO: The company confirmed it is considering the potential sale of its Yinlu peanut milk and canned rice porridge businesses in China, which generated sales of CHF700 million in 2019.

-GUIDANCE: Nestle said it would maintain its 2020 guidance "for the time being," adding it expects improvement in organic-sales growth and underlying trading operating profit margin. Underlying earnings per share in constant currency and capital efficiency are also expected to increase. The company said it is still early to fully assess the impact of Covid-19.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

April 24, 2020 09:20 ET (13:20 GMT)

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