By Ayomide Otitoju
Nestlé reported a 10.3% decline in first-half net profit to 5.1 billion Swiss francs ($6.4 billion) on Tuesday, as weak consumer spending in China and high input costs continue to weigh on the Swiss food giant.
While group sales dipped just 1.8% to 44.2 billion francs, the company attributed the decline largely to price hikes for coffee and cocoa, offset by stronger Swiss currency pressures. The company’s brands include Nespresso, KitKat, Maggi, Purina, and Gerber.
“We are taking decisive measures to strengthen our business in Greater China,” said Chief Executive Laurent Freixe. China’s sluggish consumer demand amid deflation contributed a 0.7 percentage point drag on Nestlé’s organic growth in Q2.
Overall organic growth reached 2.9% for the quarter. The company reiterated its commitment to its 2025 guidance despite “increased headwinds,” targeting an operating margin of at least 16%, down from 17.2% in 2024. The first-half margin stood at 16.5%.
Nestlé’s shares fell 3.5% on the Swiss stock exchange following the results, which missed revenue expectations but slightly exceeded profit forecasts. The company has been under pressure following a CEO shakeup last year amid weak demand for household goods.
Its share price dropped nearly 25% in 2024, prompting concern in Switzerland, where many pension funds are heavily invested in the firm. In response, Nestlé has introduced cost-cutting measures and new product strategies aimed at reviving growth, especially in Asia.
