Nestle and Unilever Facing Stiff Market Challenges Amid Global Cost Crisis
Nestle and Unilever are navigating a sluggish market response despite slower price hikes. Both consumer goods giants reported lower-than-expected first-half sales growth. Unilever's shares rose after maintaining a strong forecast, while Nestle’s shares dipped due to a downgraded sales outlook. The industry continues to grapple with rising costs and economic pressures.
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Nestle and Unilever, two of the world's leading consumer goods companies, are grappling with lukewarm market responses even as they slow down price hikes. Despite strategic efforts to attract cost-conscious customers, both companies reported first-half sales growth below market expectations, as revealed on Thursday.
Unilever saw its shares climb 6.2% after sticking to its annual sales forecast and surpassing profit expectations for the first half. In contrast, Nestle's shares fell by 5.5% following a lowered sales outlook. The jump in Unilever's stock marks its highest level since November 2020.
The consumer goods sector has been under immense pressure due to rising costs for raw materials, energy, and shipping. Nestle adjusted its organic sales outlook to at least 3%, down from about 4%, as cost-conscious consumers continue to shift towards cheaper alternatives. Unilever's CEO highlighted the ongoing promotional activities in Europe and the U.S. and cautioned that subdued pricing will likely persist in the coming quarters.
(With inputs from agencies.)