By Aimee Look
Nestle reported a drop in sales for the first quarter, as its new Chief Executive Philipp Navratil continues to undertake a sweeping overhaul of the food company's structure.
The maker of KitKat chocolate bars and Nescafe coffee reported a 5.7% drop in sales to 21.32 billion Swiss francs ($27.17 billion). Nestle's reported sales beat company-compiled analyst expectations of 21.27 billion Swiss francs.
Nestle had a string of setbacks in recent years, marred by weaker-than-expected results, management upheaval and an infant-formula recall. Navratil has initiated a string of changes since taking the helm, reorganizing the business around four main categories, cutting around 16,000 jobs, and selling off brands.
Real internal growth, which measures the volume of products sold, is a priority for Nestle going forward, and for the first quarter it rose 1.2% on-year--exceeding analyst expectations of 0.1%. Growth was led by the Nespresso-maker's coffee businesses, and its confectionery business.
The company said it is in negotiations with potential partners for its Waters and Premium Beverages business, and is looking at buyers for its mainstream vitamins, minerals and supplements arm. This comes after Nestle said it would offload the rest of its ice-cream business.
Leaner businesses are in vogue for the industry as consumers tighten their spending habits and trade down to white-label brands in lieu of branded products. Fears of rising food prices are being further amplified by heightened energy costs, as a supply crunch brought on by the Iran war hikes up the cost of oil.
The packaged foods conglomerate's efforts to focus its operations come as many of its peers are also slimming down brand offerings and shifting away from large, sprawling portfolios.
Dove soap-maker Unilever spun off its ice-cream business last year into the Magnum Ice Cream company, and recently clinched a deal with spice-maker McCormick to combine food businesses. U.K. sugar-to-clothing business Associated British Foods said earlier this week it would separate its budget retail Primark business from its food business.
Simultaneously, packaged food companies like Nestle are grappling with a growing cohort of health-conscious consumers who have lost their appetite for ultraprocessed foods.
Meanwhile, though sales fell on a reported basis, they grew 3.5% in the first quarter on an organic basis. Organic sales growth exceeded company-compiled consensus of analyst expectations at 2.4%.
Write to Aimee Look at aimee.look@wsj.com
(END) Dow Jones Newswires
April 23, 2026 02:38 ET (06:38 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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