Nestle flags further potential price hikes as tariffs, commodities weigh on margins

What stands out here is CEO Laurent Freixe said the company was considering further price rises this year

Moreover, The KitKat maker said U

Conversely, Tariffs risk exacerbating existing commodity price pressures

Nurphoto | Getty ImagesSwiss food giant Nestle said Thursday that prices for its KitKat bars and Nespresso coffee pods could rise further in the second half of this year, as U

Tariffs risk exacerbating existing commodity price pressures

CEO Laurent Freixe said that he was "satisfied" with broad price hikes implemented in the first half of the year, but said that company was still considering whether further action would be needed. "Will we need a bit more [pricing action]

However, " Freixe said on an earnings call in response to a question on pricing action (an important development). "We might need a little bit more, but most of it is already done and will be seen reflected in the next quarters

On the other hand, "Nestle s were down 4

London time (5:50 a (something worth watching)

The data indicates that world's largest packaged goods company posted better-than-expected first-half organic sales growth as it leaned on price hikes to offset higher input costs for its coffee and cocoa-related ducts, amid market uncertainty

This tells us that was led by price rises of 2

Conversely, "We face an unprecedented scenario, where two of our major commodities have reached historical highs," Freixe said, referring to coffee and cocoa commodity costs

Stock Chart IconStock chart iconCoffee and cocoa prices. "We obviously had to take action, considering recent developments

Being the leaders in the industry, we had to take action quickly," Freixe added

Nestle's total reported sales declined 1

Additionally, Underlying trading operating fit (UTOP) margins dipped 0

Chief Financial Officer Anna Manz said the company had faced headwinds in the first half from currency fluctuations, driven by a stronger Swiss franc, and minimal early impacts from U

At the same time, However, she said she expected those headwinds to worsen in the second half. "Second half margins will be significantly below the first half, she said, noting that price rises would be "more than offset by the increase in input costs, tariffs and fx [foreign exchange]

Moreover, "The company nevertheless maintained its 2025 guidance for organic sales growth to imve versus 2024 and for an underlying trading operating fit margin of 16% or above, in light of current trends

Fewer, bigger, betterNestle's stock has lagged major rivals such as Unilever and Danone over recent years amid weaker sales growth and revised guidance, even as the sector at large has come under pressure from higher commodity prices and increased private label competition (which is quite significant), given the current landscape

Freixe, who took the helm in September, has vowed to refocus the, saying a slew of acquisitions under his predecessor had "weakened the fabric" of the company. "With our six 'big bets,' we are ing a fewer, bigger, better apach," Freixe said Thursday (which is quite significant)

However, Nestle's six 'big bets' refer to its priority duct : Those include its infant formula 9, Nescafé Espresso Concentrate, the Maggi air fryer range, chocobakery, Purina's gourmet pyramid-shaped cat food, and Nescafé Dolce Gusto Neo, in today's market environment

The company meanwhile said it was conducting a strategic review of some of its underperforming vitamin brands, including Nature's Bounty, Osteo Bi-Flex, noting that this could result in divestment, given the current landscape. "All this is consistent with our apach across the group of focus and simplification," Freixe added. "We're taking the right actions today to strengthen our growth ambitions for the future (which is quite significant).