ZURICH (Reuters) -Nestle reported better-than-expected nine-month sales on Wednesday and raised its full-year guidance as the world’s largest packaged food company successfully passed on price increases to customers.
The maker of KitKat chocolate bars and Nescafe instant coffee posted sales of 69.1 billion Swiss francs ($69.43 billion), beating the 68.9 billion francs forecast in a company gathered consensus of 23 analysts.
Organic growth, which cuts out the impact of currency movements and acquisitions, was 8.5% in the nine months to the end of September, better than the 8.3% increase that was forecast, and the company’s highest organic growth since 2008.
Most of the organic growth was driven by extra pricing – which accounted for 7.5 percentage points of the increase, while volumes increased by 1 percentage point.
As a result Nestle raised its full year outlook, saying it now expected organic growth of “around 8%” for 2022, up from its previous expectation of a 7% to 8% increase.
The Swiss company confirmed its target for a trading operating profit margin of around 17%.
“We delivered strong organic growth as we continued to adjust prices responsibly to reflect inflation,” Chief Executive Mark Schneider said in a statement.
Still, the executive raised concerns about the “challenging economic environment,” which he said was impacting the purchasing power of many customers.
($1 = 0.9953 Swiss francs)
(Reporting by John Revill, Editing by Miranda Murray)