Nestle said it has been able to pass on price increases to customers so far but warned that this was less certain going forward if inflation continues to escalate.
Organic sales at the Kit Kat maker grew more than expected in the first quarter of 2022 at 7.6% thanks to an average 5.2% hike in prices across its brands and markets.
Guidance was also maintained for the year with the underlying operating profit margin forecast at between 17%-17.5%, compared to 17.4% in 2021, with sales expected to grow 5%.
Russia’s invasion of Ukraine further exacerbated the inflation problem, which is currently at a 30 year high in the UK, pushing the cost of energy and essential commodities up.
The war has also forced big brands to reconsider their operations in Russia, and while Nestle has suspended some of its non-essential operations, it continues to sell supplies such as infant formula in the country.
Branded products are yet to feel the impact of the cost of living crisis, with Nestle "the latest business to point to premium product ranges as the main growth drivers," according to Matt Britzman, an equity analyst at Hargreaves Lansdown.
"Nestle's portfolio contains some strong brands from KitKat to Purina pet food which will help volumes hold on despite price rises, to some extent," Britzman added.