Nestlé Beats Q4 Sales Expectations and Refocuses on Core Brands
Nestlé reported stronger-than-expected fourth-quarter sales on Thursday and announced plans to sharpen its strategic focus around four key business segments. As part of this restructuring effort, the company confirmed it is moving forward with plans to sell its remaining ice cream operations.
The Swiss food and beverage giant, known for brands such as Maggi and Nescafé, said it will prioritize its Coffee, Petcare, Nutrition, and Food & Snacks divisions. Nestlé is currently in advanced negotiations to sell its ice cream business to Froneri, the owner of Häagen-Dazs and a joint venture between PAI Partners and Nestlé.
CEO Pushes Strategic Overhaul Amid Operational Challenges
New CEO Philipp Navratil is leading the transformation strategy, aiming to make Nestlé a more agile and focused company. However, his efforts have been complicated by the company’s largest infant formula recall in recent years. Nestlé warned that product shortages and returns linked to the recall are likely to affect sales volumes in 2026.
Navratil emphasized confidence in the company’s direction, stating that faster execution of a more focused strategy should drive sustainable improvements through 2026 and beyond.
Sales Outlook and Profit Margin Expectations
Nestlé expects full-year organic sales growth in 2026 to range between 3% and 4%. The company also forecast an improvement in its underlying trading operating profit margin this year, following a margin of 16.1% in 2025.
Organic sales — which exclude currency fluctuations and acquisitions — increased 4% in the fourth quarter ended December 31, surpassing market expectations of 3.4% growth.
Cost Cuts and Portfolio Restructuring Continue
Since taking office in September, Navratil has announced plans to cut 16,000 jobs as part of broader efficiency measures. Nestlé is also navigating headwinds including U.S. import tariffs, foreign exchange pressures, and weaker consumer spending.
The company confirmed it has completed a strategic review of its mainstream and value vitamin and supplement brands and is now exploring discussions with potential buyers. Additionally, Nestlé expects to deconsolidate its water business starting in 2027 and has initiated formal talks with prospective partners during the first quarter.
With its portfolio reshaping underway and strong fourth-quarter performance, Nestlé is positioning itself for more focused and sustainable growth in the coming years.
