Nestle Nine-Month Report: The first nine months of the year’s results from Nestle (NESN.S) were released on Thursday. They were a little below what experts had predicted. According to the main reason for this poor performance, customers didn’t want to accept higher product prices, which hurt sales numbers. Notably, Nestle stressed that the fact that weight loss drugs were available had kept their sales numbers the same.
Prices in packaged goods have slowly increased over the past few years. They say this is because of higher input costs that started because of COVID-19 and got worse after Russia invaded Ukraine. This increasing chain reaction changed many goods, from the price of sunflower oil to the cost of shipping, which messed up international supply chains.
Regarding this, Nestle’s price increase of 8.4% was just below the average estimate of 8.6% by industry experts. Real internal growth, a measure of sales numbers, also went down by 0.6%, which was what was expected.
There have been worries among analysts and buyers that companies may have raised prices too much. Because of the rising cost of living, they told businesses to focus on marketing and new ideas again, especially since private-label goods are gaining market share at the expense of well-known brands.
Nestle said that for the nine months ending in September, organic salesthose not affected by changes in currency or acquisitionsgrew by 7.8%, a big increase. This was a very good result, but it was a little lower than the 8.1% average forecast by experts.
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It only took 0.4% less to report sales, reaching 68.8 billion Swiss francs ($76.54 billion).
Recently, Nestle’s leaders admitted that the rate of cost growth has slowed down. But they have also told customers to prepare for prices to keep going up on things like toilet paper, coffee, and soap. Companies still need help paying their bills because of long-term, high costs.
A Nestle spokeswoman confirmed that the company has not seen any drops in sales in answer to questions about how Novo Nordisk’s (NOVOb.CO) weight-loss medicine Wegovy might affect the market for packaged foods.
Wegovy has gotten people’s attention and made people talk about how it might affect home and store food sales. Yesterday, Walmart (WMT.N), the biggest store in the world, said that people were eating a little less and taking more drugs like Wegovy to suppress their hunger. This caused Nestle’s shares to drop earlier this month.
Moving and making other changes to your life has been shown to help you lose 15% of your body weight. The medicine is currently sold in the United States, Norway, Denmark, and Germany as of late July. Kasim Kutay, CEO of Novo Holdings, says that profits from Wegovy and other medicines will likely be more than $12 billion in the next few years.
Nestle has confirmed its predictions for the whole year. It expects organic sales growth of 7% to 8% and an operating profit margin for core operations of 17.0% to 17.5%.
Our Reader’s Queries
What is the outlook for Nestlé 2023?
We have confirmed our full-year 2023 outlook, which predicts a growth in organic sales between 7% and 8%, and an underlying trading operating profit margin between 17.0% and 17.5%. Additionally, we expect an increase in underlying earnings per share in constant currency between 6% and 10%.
How is Nestlé doing financially?
Nestle has reaffirmed its full-year projections, anticipating organic sales growth of 7% to 8% and an underlying trading operating profit margin of 17.0% to 17.5%.
What is the net profit of Nestle in 2023?
Nestle India has announced a net profit of ?908 crore for the quarter ending September 2023, marking a significant growth of 37.27% from the same period last year. This impressive figure includes a one-time gain of ?106.4 crore. The company’s financial performance is a testament to its commitment to delivering quality products and services to its customers. Nestle India’s continued success is a reflection of its strong leadership and strategic vision for the future.
What is the market outlook for Nestlé?
Nestle SA’s stock price forecast looks promising, with 22 analysts predicting a median target of 134.42 over the next 12 months. The high estimate is 149.46, while the low estimate is 98.13. This indicates a potential increase of +16.08% from the current price of 115.80. Investors can expect a positive outlook for Nestle SA’s stock in the coming year.