Nestle Earnings: Organic Growth Short of Expectations; Cautious Fiscal 2024 Guidance

Nestle reported fiscal 2023 results that included organic growth of 7.2% (real internal growth of negative 0.3% and pricing up 7.5%), below the company-compiled consensus estimate of 7.4% and our own 7.5%, driven predominantly by worse-than-expected real internal growth (negative 0.3% versus negative 0.1% for consensus and 0.1% in our model). The underlying 17.3% trading operating margin was also short of the 17.4% consensus expectation, but ahead of our 17.1% forecast. Regionally, real internal growth (volume and mix effect) was positive in emerging markets and negative in developed markets as pricing continued to be strong across all geographies. At the product category level, water and prepared dishes, and cooking aids had the weakest real internal growth in fiscal 2023, down 5.1% and 2.5% respectively.