Nestle sales jump as prices rise

Nestle reported a jump in quarterly sales on Tuesday, after the Swiss food giant put prices up by nearly 10%.

The owner of Kit Kat, Nespresso, Felix cat food, Perrier water and Thomy mustard, among others, said total reported sales rose 5.6% in the three months to March end to CHF23.5bn, while prices rose 9.8%, reflecting "significant" cost inflation. Organic sales growth was 9.3%, ahead of forecasts.

Real internal growth, Nestle’s term for sales volumes, eased 0.5%. Most analysts had been expecting a larger decline, however.

Mark Schneider, chief executive, said: "Nestle delivered strong organic growth in the first quarter, as teams worked diligently to protect volume and ensure resilient mix. Portfolio optimisation efforts and responsible pricing helped to offset the ongoing pressures from two years of cost inflation."

The firm also reiterated its full-year outlook. It expects organic annual sales growth of between 6% and 8% with an underlying trading operating profit margin of between 17% and 17.5%.

Underlying earnings per share are expected to rise by between 6% and 10% on a constant currency basis.

Shares in Nestle were trading 1% higher as at 1100 BST.

Nestle’s results coincide with industry data, also published on Tuesday, showing UK grocery price inflation hit 17% in the 12 weeks to 16 April.