Nestlé plans price increase – 02/16/2023 – Market

Nestlé will further raise prices this year, Chief Executive Mark Schneider said on Thursday (16), after more expensive raw materials contributed to the company’s annual net profit falling short of market expectations. analysts.

The maker of Nescafé soluble coffee and KitKat chocolate bars raised prices by 8.2% last year, but that did not fully offset the impact of rising ingredient costs on margins.

“Our gross margin is down about 260 basis points — that’s huge. That’s after all the increases we’ve done in 2022,” Schneider told reporters.

Barclays analyst Warren Ackerman said he expected “nearly all” of the lower-than-estimated volume to be the result of Nestle rethinking the range of products it makes and supply chain constraints.

Net income fell to CHF 9.3 billion (£52.6 billion), below expectations of CHF 11.6 billion (£65.6 billion), although the consensus forecast did not take into account the loss at Nestlé’s Aimmune subsidiary last year, analysts said.