Swiss consumer brands behemoth Nestlé S.A. sparked a share sell off on Thursday after slashing its full-year sales guidance.
In a half-year trading update, the owner of Nescafé, KitKat, Maggi, Haagen-Dazs and hundreds of other household names said it expects organic sales growth of around 3% for the full year.
It marks a 25% reduction from the 4% forecast issued in April.
Nestlé boss Mark Schneider said the conglomerate is seeing “improved volume and mix growth”, but “we have seen pricing come down faster than expected. Therefore, we consider it prudent to adjust our guidance for the year, with organic sales growth now expected to be at least 3%”.
Net profit in the first six months of Nestlé’s financial year was flat at 5.6 billion Swiss francs (£4.95 billion) though margins improved by 30 basis points.
Purina PetCare was the MVP in the period, with coffee and confectionery also performing comparatively well.
But it was not enough to stave off a 4% share repricing down to 89.7 Swiss francs each.