VEVEY, SWITZERLAND — Nestlé S.A. shared first-quarter financial results April 24, reporting net sales of 20.8 million CHF ($21.4 billion), down 6.2% from year-ago sales of 22.2 billion CHF ($22.9 billion). A portion of these losses were attributed to acquisitions net of divestitures (4.7%) and foreign exchange rates (5.8%).
“Our company remained resilient in the first quarter, reflecting our diversified product portfolio and our strong local presence in 187 countries,” said Mark Schneider, chief executive officer of Nestlé. “However, this crisis is far from over and we will face many uncertainties in the coming quarters. We will continue to adapt quickly to changing consumer needs and to challenges in our global supply chains.”
The company’s Purina PetCare segment continues to be a stronghold for Nestlé, described by François-Xavier Roger, executive vice president and chief financial officer, as having a “stellar year” in 2019.
“Purina PetCare was again the standout category, with continued momentum in e-commerce and premium brands,” Roger said.
The segment reported net sales of 3.5 billion CHF ($3.6 billion) during the first quarter, an increase of 8.7% from year-ago sales of 3.2 billion CHF ($3.3 billion). This reflects an organic growth rate of 13.9% for Purina PetCare.
Note: Swiss franc (CHF) to USD conversions are based on April 29, 2020 exchange rates.
Purina was the company’s single-largest contributor to growth over the first quarter of 2020, with Pro Plan and Purina ONE premium brands driving sales. Purina products also drove double-digit sales growth for all three of Nestlé’s global geographic regions, including China.
Pro Plan and Fancy Feast brands, veterinary products, premium brands and e-commerce supported double-digit sales growth in North and South America, while Felix, Purina ONE and Tails.com drove sales in Zone EMENA (Europe, the Middle East and North Africa). Purina PetCare delivered overall positive growth in Zone AMS (Asia, Oceania and sub-Saharan Africa), despite an overall decline in net sales and organic growth in that region.
Nestlé reported its essential product categories saw increased demand throughout the first quarter, Purina products included.
Nestlé also commented on COVID-19, detailing the company’s impacts and efforts amid the pandemic. The company reported some supply chain disruptions and temporary workforce shortages but continues to show resiliency in manufacturing and retail.
Several markets, especially North America and Europe, showed a sharp increase in demand in March, which the company attributed to consumers stocking up on essential goods. Business in China experienced a quick downturn as movement restrictions spanned nearly the entire three-month period.
E-commerce sales increased by 29.4% over the first quarter. This marks the first time Nestlé’s e-commerce sales have exceeded 10% of its total group sales.
As for its employees, the company has guaranteed 12 weeks of regular wages for its hourly and salaried workers in the event of temporary facility shutdowns.
“Nestlé has a special responsibility at this time. Our food and beverage products help keep people healthy, provide comfort and support recovery,” Schneider said. “Our people, in particular our frontline workers, have shown extraordinary commitment in keeping our business running and meeting consumer needs. We will continue to work hard to provide food and beverages to people across the world, every day.”
The company maintained its full-year 2020 guidance, stating it is still too soon to effectively gauge the full impact of the pandemic.
“We are confident that — together with all those who are fighting against the pandemic and its consequences — we will also overcome this one,” Schneider concluded.
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