Nestle struggles amid weak China market
Sales, however, only dipped by 1.8 percent to 44.2 billion francs, which was due in large part to passing on higher cocoa and coffee prices to consumers, although faced even greater headwinds from the strong Swiss currency.
"We are also taking decisive measures to strengthen our business in Greater China," said chief executive Laurent Freixe.
The company said China, which has suffered sluggish domestic consumption amid a deflationary price environment, had a 0.7 percentage point impact on organic growth in the second quarter.
Overall, the company reported 2.9 percent quarterly organic growth, which strips out currency effects and other elements to measure performance.
Nestle warned China would continue to weigh on growth as it invested to turn around its performance.
Nestle's shares fell 3.5 percent in a Swiss market that was flat overall, as the sales figures missed the analyst consensus calculated by Swiss financial news agency AWP. Net profit came in slightly higher than expected.
Nestle made a surprise switch of its chief executive least year amid soft spending by consumers for food and household goods.
Nestle's share price slumped by nearly a quarter last year, raising concerns in Switzerland, where pension funds invest heavily in the company.
The company launched a number of measures to boost its product offering and cut costs.
That was reflected in better organic growth in the second quarter compared to the same period last year, and Nestle said that it was expected to continue for the rest of the year.
Nestle said it was maintaining its 2025 guidance "despite factoring in increased headwinds".
It aims for an underlying trading operating profit margin of at least 16 percent this year, compared to 17.2 percent in 2024. It came in at 16.5 percent in the first half of the year.
© 2025 AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
France 24
11 hours ago
- France 24
McDonald's sees US rebound but says low-income diners remain stressed
The fast-food chain notched a 2.5-percent rise in US comparable sales after the same benchmark shrunk by 3.6 percent in the first quarter. McDonald's Chief Executive Christopher Kempczinski described the US consumer base as "bifurcated," with weakness in low-income consumers a reason for lingering caution on the outlook, he said at the outset of an earnings conference call. Later, in response to an analyst question, Kempczinski said "real incomes are down" for this population despite higher wages. "There's a lot of anxiety and unease with that low-income consumer," Kempczinski said. "I think we could all speculate the reasons for that, probably tariffs and the impact that might have, be questions around the employment situation." People are either skipping meals like breakfast, "or they're trading down, either within our menu or they're trading down to eating at home," he said. In terms of the results, McDonald's reported an 11-percent rise in profits to $2.3 billion, while revenues increased five percent to $6.7 billion. Global comparable sales increased 3.8 percent. Executives pointed to strength in Japan, while promotions in Germany for the Chicken Big Mac and France for the Big Arch burger also boosting demand. McDonald's has also unveiled meal promotions in the United States such as the $5 Meal Deal and the Snack Wrap for $2.99. However, executives said they were still working to implement the offering throughout its network. US franchisees have sometimes resisted such promotions because of profit concerns. "Too often" consumers may drive up to a McDonald's "and you're seeing combo meals that could be priced over $10 and that absolutely is shaping value a negative way," Kempczinski said. "We've got to get that fixed," he said, adding that the company is holding "active and productive" conversations with franchisees. Shares of McDonald's jumped 3.0 percent near midday.
France 24
12 hours ago
- France 24
Swiss president to meet Rubio as surprise tariff hike looms
The Alpine country faces a 39-percent duty on many of its exports to the United States come Thursday, one of the highest levels among dozens of economies due to be hit by President Donald Trump's upcoming tranche of tariffs. President Karin Keller-Sutter and Economy Minister Guy Parmelin hurried to Washington "to facilitate meetings with the US authorities at short notice and hold talks with a view to improving the tariff situation," the Swiss government said in a statement. On Wednesday morning, Keller-Sutter and Parmelin arrived at the State Department in Washington for their scheduled talks with US Secretary of State Marco Rubio. The White House previously told AFP that there was, for now, no meeting planned with Trump -- who threatened in April to slap a 31-percent tariff on Swiss goods. It remains unclear if the Swiss delegation will meet with top US economic officials during their trip. Trump surprised the country last week when Washington released an updated list of tariff levels for dozens of US trading partners, due to take effect Thursday, showing the Swiss duty would be raised to 39 percent. This is significantly higher than the 15-percent level faced by economies like the European Union, Japan and South Korea. On Tuesday, Trump told CNBC in an interview that he "did something with Switzerland the other day" and spoke to Keller-Sutter. "The woman was nice, but she didn't want to listen," he added. The wave of US tariffs taking effect Thursday do not cover sectors that are being separately targeted by US investigations such as pharmaceuticals, a key sector for Switzerland. But Trump signaled that fresh duties on pharmaceutical imports could be announced within the week, starting at a low level before potentially surging as high as 250 percent.
France 24
18 hours ago
- France 24
Poland: Nationalist Nawrocki sworn in as president, in blow for Tusk
01:45 06/08/2025 China eases travel rules to boost tourism post-pandemic 06/08/2025 Netanyahu signals possible Gaza war expansion amid ongoing bombing Middle East 06/08/2025 Bill and Hillary Clinton subpoenaed in Epstein probe 06/08/2025 Over 11,000 hectares engulfed in southern France wildfire 06/08/2025 UN calls report on Israeli expansion of Gaza war 'deeply alarming' 06/08/2025 Survivors mark 80 years since Hiroshima atomic bombing 05/08/2025 'Gloves are off: Intense redistricting and partisan warfare' ahead of 2026 US Midterm Elections Americas 05/08/2025 Plastic pollution inextricably linked with numerous 'public health crises' Environment
