Nestle forecasts revenue slowdown as inflation eases

Nestle forecasts revenue slowdown as inflation eases

Nestle SA forecast slower sales growth this year as the maker of Nespresso eases off on price increases, trying to encourage consumers to buy more.

Revenue should increase about 4% in 2024 on an organic basis after gaining 7.2% last year, Nestle said Thursday. The company also expects a 6% to 10% gain in underlying earnings per share.

Chief Executive Officer Mark Schneider said that in 2024, Nestle is prioritizing growth led by volume and mix — shoppers switching to pricier formats — boosted with increased marketing and innovation.

The company’s underlying operating margin rose 40 basis points in constant currency to 17.3% in 2023, and it expects a further moderate improvement this year.

Nestle returned to growth through higher volumes and consumers choosing more expensive formats: its real internal rate of growth — a proxy for volume — was positive at 0.4% in the final quarter of 2023, the first increase in a year and a half.

Companies like Nestle are looking to claw back market share after the highest inflation in decades pushed shoppers to cheaper white-label products.

Danone reported fourth-quarter sales rose in line with expectations Thursday amid easing inflation for the yogurt maker.