Nestlé shares climbed 2 percent in early Thursday trading to 85.5 francs. The security approached price levels last seen in June 2025, having traded near 74 francs less than three weeks prior. The market reaction followed third-quarter financial figures released by management on Thursday morning.
The world's largest food company posted organic growth of 4.0 percent in the third quarter, accelerating from 3.7 percent in the preceding quarter. The expansion was driven primarily by significantly higher sales volumes. Management reaffirmed its financial targets for the full year.
Total sales for the first nine months stood at 65.87 billion francs, remaining virtually flat compared to the previous year, according to the Thursday announcement. The product portfolio includes Nespresso coffee, KitKat chocolate bars, and Purina pet food. Organic growth for the nine-month period reached 3.7 percent.
Internal real growth, which measures sold product volumes, reached 2.8 percent in the third quarter. This metric had stood at 1.8 percent in the second quarter and 1.2 percent in the first quarter. Price increases contributed 1.1 percentage points to organic growth during the third quarter.
The reported figures exceeded consensus expectations compiled by AWP, where analysts had anticipated an average organic growth rate of 3.5 percent and volume growth of 1.7 percent for the third quarter. Growth momentum was supported by a recovery in the pet food segment, positive developments in foods and snacks such as Maggi seasoning and KitKat, and the water business, which benefited from warm summer weather. Volume growth was broad-based, with increases recorded across all global regions and managed business units.
Bernstein characterized the quarterly performance as another important step in the operational turnaround, highlighting internal real growth figures that represented the highest level recorded since 2021. Bank Vontobel similarly described the third-quarter metrics as evidence of an operational recovery, drawing particular attention to the volume growth trends while noting that coffee and nutrition underperformed.
Volume development serves as a key indicator for the company's operational recovery. Following multiple years characterized by sluggish growth driven primarily by price adjustments, Chief Executive Officer Philipp Navratil, who took office slightly over a year ago, has prioritized sustainable volume expansion. Strategic initiatives include increased investments in successful brands, advertising, and innovation, alongside efforts to streamline operations and focus on high-margin businesses.
Management confirmed its full-year guidance for 2026, targeting organic growth between 3 and 4 percent and an improved adjusted operating margin relative to the 16.1 percent reported in the prior year.
Nestlé will remove its Russian operations from its consolidated financial statements at the end of September 2026. The decision follows the placement of local entities under temporary external administration by Russian authorities. The financial impact on the adjusted 2026 results is expected to remain limited. Bernstein noted that the Russian business previously contributed 3 to 4 percent to earnings, suggesting potential minor downward revisions to profit estimates. Vontobel viewed the deconsolidation more favorably, stating that the move provides additional clarity while carrying limited impact on the annual results.
