Investing.com -- Nestlé on Thursday posted 2.8% organic sales growth for the first quarter of 2025, supported by strong pricing actions and robust performance in emerging markets, despite ongoing market volatility.
Total reported sales rose 2.3% year-over-year to CHF 22.6 billion, with foreign exchange impacts reducing sales by 0.5% and mergers and acquisitions contributing 0.1% to growth, as per a company statement.
Pricing gains accounted for 2.1% of the growth, while real internal growth (RIG) contributed 0.7%.
Across geographies, growth was broad-based, with developed markets growing 1.6% organically and emerging markets expanding at a stronger 4.5%, driven primarily by pricing.
Retail sales posted 2.5% organic growth, while out-of-home channels grew 6.6%, and e-commerce sales surged 15.1%, accounting for 20.1% of total group sales.
Confectionery led the way with 8.9% organic growth, buoyed by pricing actions and strong sales of KitKat and the expanding chocobakery range.
Powdered and liquid beverages saw a 5.2% increase, largely driven by higher coffee prices. Coffee alone grew 5.1%, while PetCare grew 1.6%, reflecting a slowdown in category demand, particularly in the U.S., although it continued to gain market share.
Water grew 2.9%, with strong performances from S.Pellegrino and Acqua Panna, although Perrier faced supply constraints.
In the Americas, Nestlé reported flat sales at CHF 8.6 billion, with organic growth of 1.9% (0.1% RIG and 1.7% pricing).
North America was virtually flat, posting 0.1% organic growth, while Latin America expanded 5.1%, driven by a 6.7% pricing increase.
Strong confectionery sales in Brazil and momentum in beverages, especially Nescafé, contributed to the growth, although Coffee mate sales declined.
In the Asia, Oceania, and Africa zone, sales grew organically by 3.1%, reaching CHF 5.5 billion. Confectionery and culinary categories, led by KitKat and Maggi, saw strong performances.
Central and West Africa, the Philippines, and India were key contributors to the region’s growth. China posted 1.7% organic growth, benefitting from sales phasing and distributor inventory build-up.
Europe delivered 2.4% organic growth on sales of CHF 4.4 billion, driven by 3% pricing and a slight decline of 0.6% in RIG.
Confectionery and coffee led growth, with strong performances from KitKat and Starbucks (NASDAQ:SBUX) products.
PetCare also contributed, led by Purina ProPlan and Purina ONE, although frozen foods and some parts of the food category continued to show weakness.
The Swiss consumer goods giant reaffirmed its 2025 guidance, which includes organic sales growth improvement over 2024 and an underlying trading operating profit margin of at or above 16%.
While the direct impacts of current tariffs are factored into the guidance, Nestlé acknowledged ongoing uncertainties related to indirect effects on consumers, currency, and commodity prices.
Among the company’s ongoing efforts to streamline operations, drive efficiencies, and invest in growth are recent ownership increases in Hsu Fu Chi in China and Orgain in Nestlé Health Science.