International Business: Nestle fends off cost inflation, helped by higher prices – Gulf Digital News

International Business: Nestle fends off cost inflation, helped by higher prices – Gulf Digital News

Nestle on Thursday confirmed it expects to grow sales around 5 per cent and keep margins broadly stable this year after higher pet food, dairy and coffee prices did not deter consumers in the first quarter, forecasting more price increases ahead.

Russia's invasion of Ukraine has forced consumer goods companies to rethink their strategy in the country, while at the same time further pushing up costs for energy and commodities, threatening food groups' profitability.

But so far the world's biggest food group, with well-known brands like Nescafe coffee and KitKat chocolate, has been able to pass higher costs on to customers.

"We stepped up pricing in a responsible manner and saw sustained consumer demand. Cost inflation continues to increase sharply, which will require further pricing and mitigating actions over the course of the year," the company said.

The group based in Vevey on Lake Geneva confirmed it expects organic sales to rise by around 5pc this year, with an underlying trading operating profit margin between 17pc and 17.5pc, compared to 17.4pc in 2021.

Peer Danone kept its financial goals unchanged on Wednesday after like-for-like sales rose 7.1pc in the first quarter.

At Nestle organic sales, which strip out currency swings and M&A, were up 7.6pc, beating