Join our community of smart investors

Petfood and frozen meals buoy Nestlé's half-years

Growth slowed in Q2, but the group still slightly exceeded sales expectations
Petfood and frozen meals buoy Nestlé's half-years

Dogs really are man’s best friends. Or so it would seem, judging by Nestlé’s half-year numbers. A strong showing from the group’s ‘Purina Petcare’ business helped to lift overall revenues up by 2.8 per cent on an organic basis – slightly higher than consensus estimates of 2.3 per cent. That improvement came despite consumers “destocking” after “pantry building” in March, ahead of widespread limitations on movement.

IC TIP: Buy at 110CHF

In line with the pattern of those lockdowns, most of Nestlé’s markets saw slower growth in the second quarter. The consumer goods giant’s ‘out of home’ channel was almost entirely shuttered during the respective three months, with water and confectionery particularly affected. But at the same time, demand for prepared meals and frozen food escalated as people stayed put within the confines of their own four walls. Vegetarian and plant-based food products became increasingly popular – with sales rising by 40 per cent, as Nestlé’s ‘Garden Gourmet’ brand made continued progress in Europe. The ‘Sweet Earth’ label also grew strongly in the US.

To continue reading...
OR
Register for free
Read 3 articles for free each month
Have an account? Sign in