Nestle 2Q Sales Growth Slowed; Guidance Shows Resilience Amid Crisis -- Earnings Review
30 July 2020 - 10:25PM
Dow Jones News
By Giulia Petroni
Nestle SA on Thursday reported results for the first half of the
year. Here's what we watched:
SALES: The Swiss and beverage giant reported sales of CHF41.15
billion in the first half, down from CHF45.46 billion in the
previous year and below a company-compiled consensus estimate of
CHF41.50 billion. Organic sales growth was 2.8%, beating analysts'
estimates of 2.3%. In the second quarter, OSG suffered a slowdown
of 1.3%.
WHAT WE WATCHED:
--GUIDANCE: Nestle's firm guidance shows the company has control
over its improving core operations despite volatility caused by the
coronavirus pandemic, according to analysts. The company expects
OSG between 2% and 3% in the full-year and an improvement in
underlying TOP margin and underlying EPS in constant currency and
capital efficiency. This compares to previous guidance for a
continued improvement in OSG and margin. Guidance assumes no
material deterioration from the present conditions in relation to
the coronavirus crisis.
--2Q SALES GROWTH: OSG slowed in quarter due to the impact of
coronavirus-related restrictions on out-of-home businesses and the
effect of consumer destocking after the stockpiling surge
experienced in the first three months of the year.
--WATERS: Water sales dropped 10.4% globally in the first half
due to the division's high exposure to out-of-home and on-the-go
consumption. Earlier this year, the company announced it is
exploring the option for the potential sale of the majority of its
waters business in North America.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
July 30, 2020 08:10 ET (12:10 GMT)
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