Nestle S.A. (OTC:NSRGF, VTX:NESN) has reported a decline in sales revenue over the year so far as hefty price hikes on the back of growing inflation failed to boost the figure.
Sales declined by 0.4% from 69.1 billion Swiss francs to 68.8 billion over the first nine months of the year, Nestle said on Thursday.
This came as the price of Nestle products around the world increased by 8.4%, with this stretching to 11.1% in Europe.
Organic growth sat at 7.8% over the nine months to September meanwhile, leaving Nestle tipping this to come in at around 7% and 8% for the full year.
“Growth was driven by pricing as we continued to navigate historic inflation levels,” chief executive Mark Schneider said.
“The recovery of our volume and mix is underway. We are seeing the benefits of our portfolio optimization initiatives and increasing marketing investments.”
Barclays noted that the results marked an underperformance, highlighting third-quarter organic sales growth of 6% as missing consensus estimates.
Moderating price rises and declining sales of Nestle’s vitamin, mineral and supplement products may also be on investors’ minds, the bank said.
For the full year, Nestle said it expected operating profit margin to sit between 17% and 17.5%, which is largely in line with Barclay’s expectations.