Nestle Stock: Shares Surge Despite Revenue Decline

Nestle experienced a remarkable stock market performance on Thursday, with shares climbing more than 6% to reach 84.02 CHF on the Swiss Exchange. This positive market response came despite challenging financial results, as the food giant reported a 1.8% decrease in revenue to 91.4 billion francs and a 2.9% drop in profit to 10.9 billion francs for the previous fiscal year. The company's organic growth of 2.2% exceeded market expectations, driven by strong performance in coffee, confectionery, and pet food segments. Growth momentum was particularly notable in emerging markets and Europe. In a move that reinforced investor confidence, Nestle announced its 29th consecutive dividend increase, raising the payout by 0.05 francs to 3.05 francs per share.

Cost Optimization Strategy

Looking ahead, Nestle has unveiled an ambitious cost-reduction program targeting 2.5 billion francs in savings by 2027, with 300 million francs already secured for 2025. These savings will primarily fund enhanced marketing initiatives. The company aims to achieve an operating margin of at least 16% in the current year, with plans to exceed 17% in the medium term. Under normal market conditions, Nestle projects organic growth to surpass 4%.

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Source StockWorld