NSRGY Nestle SA (PK)

-North America and Europe benefited from stockpiling in March, while China registered a sales decline due to coronavirus-related restrictions

-Prepared dishes and cooking aids, Purina PetCare and coffee were among the largest growth contributors

-Out-of-home consumption channels reported a significant decline, whereas e-commerce grew to exceed 10% of total sales

By Giulia Petroni

Nestle SA said Friday that sales fell in the first quarter and backed its full-year guidance, saying it is still early to assess the full impact of the coronavirus pandemic.

The Swiss food and beverage giant said sales for the period were 20.81 billion Swiss francs ($21.36 billion), down from CHF22.18 billion the previous year. Divestitures and foreign exchange contributed to the decline.

Analysts had forecast sales at CHF21.10 billion, according to a company-compiled consensus.

Organic growth came to 4.3%, driven by the Americas and Europe, the Middle East and North Africa, it said.

North America and Europe recorded increased growth in March, supported by stockpiling, while China registered a significant sales decline due to movement restrictions.

Nestle said sales accelerated of prepared dishes and cooking aids, Purina PetCare, coffee, and Health Science products, whereas confectionary products and ice cream sales declined due to "reduced gifting and impulse buying."

By channel, Nestle Professional, Waters, and Nespresso stores experienced substantial declines as a consequence of the shift from out-of-home to in-home consumption. On the other hand, e-commerce sales grew by 29.4%, exceeding 10% of the company's total sales.

Nestle maintained its guidance for the full year, saying it expects improvement in organic-sales growth and underlying trading operating profit margin. It said it expects underlying earnings per share in constant currency and capital efficiency to increase.

"As it is still too early to assess the full impact of Covid-19, we maintain our original full-year 2020 guidance for the time being," Nestle said.

The company said it is exploring options, including a sale, of its Yinlu peanut milk and canned rice porridge businesses in China.

Shares at 0710 GMT were 1.1% higher at CHF105.94.

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

April 24, 2020 03:31 ET (07:31 GMT)

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