Jul 23, 2026 earnings call — Focus on RIG-led growth and portfolio sharpening
Nestlé tightened 2026 organic growth guidance to a range of 3% to 4% and reported H1 organic sales growth of 3.6%.
Revenue $52.8B (est $53.2B) · EPS $2.72 (est $2.56)
Key quotes
"For the last 4 quarters, we have delivered good OG and RIG. Now we need to keep delivering consistently and accelerate RIG to at least 2%."
"As you know, we have been increasing investment in marketing, up from 8.1% 2 years ago to 8.9% today."
"In the first half, we delivered CHF 600 million of incremental procurement and operational efficiency savings, slightly ahead of plan, bringing cumulative savings to CHF 1.7 billion."
Analyst Q&A 8
pets growth and margins
Q (Olivier Nicolai · Goldman Sachs): When will pet growth reach medium-term expectations and will North America see further destocking in H2? Also asked for margin outlook for H2 and 2027 given commodity and logistics moves.
A: They said pet fundamentals are strong but U.S. retailer inventory reductions held back growth this quarter; they see no further lumps and expect good underlying momentum. For margins they expect H2 broadly similar to H1, with progress toward a medium-term margin of 17% or more into 2027, although external factors will affect the exact shape.
"So on Pet Care, we feel good about the medium-term expectations of the category." — Anna Olive Manz (CFO)
impact of inventory and delistings
Q (Guillaume Gerard Delmas · UBS): How much did North America inventory reductions and a European customer delisting affect Q2 OG, and will these headwinds persist? Also asked whether core softness is due to a few underperformers or broader share loss.
A: They view both the U.S. retailer inventory reduction and the European delisting as largely one-off or phasing events, not structural. On the core, they said performance is improving (170 basis points half-on-half) and that when they execute well they win share; infant formula remains a large drag but is improving with trust rebuilding.
"So I see both these things as somewhat one-off in nature." — Anna Olive Manz (CFO)
European delisting and coffee pricing
Q (David Hayes · Jefferies): Was the European delisting pan-category or limited, and what drove Starbucks pricing timing and any prebuy? Also asked timing for Nespresso price moves and why Nespresso consumption softened.
A: They said delistings were not pan-category but mainly where input costs moved, like coffee and confectionery, and they expect to resolve them. Pricing is staggered to take consumers along; there was no prebuy in Q1 for Starbucks. For Nespresso they focus on household penetration, noting new households may have slightly weaker purchasing power but represent a growth opportunity, especially in the U.S.
"When we price, and we've always said that we do that in a staggered way." — Philipp Navratil (CEO)
AOA strength and margin bridge details
Q (Warren Ackerman · Barclays): Can you tour AOA country performance and outlook, and explain the 'other' 70 bps bridge item, the pension credit and ongoing infant formula effects?
A: They said AOA growth was broad-based: China stabilized amid negative category trends, while India, ASEAN and other emerging markets were very strong and gaining share. On the margin bridge they said infant nutrition is the biggest element of the headwind but not the only one (other items include higher transportation from the Middle East); the pension credit was a one-off 30 basis point benefit from a change giving some employees a lump-sum option, with no ongoing P&L impact.
"So the biggest element of the headwind is infant nutrition, but it is only one element." — Anna Olive Manz (CFO)
U.S. pet fresh food and infant formula plans
Q (Nicolas Jerome Ceron · BofA): Will Nestlé enter U.S. fresh pet food at scale or accept share loss, and would they redeploy capital into U.S. infant formula if available?
A: They said they are already playing in fresh pet via Merrick and a stake in Just Food For Dogs, and they are looking at the space while focusing on RIG-led growth that also must make sense for margins. On U.S. infant formula they have no plans to enter the market at the moment and are focused on rebuilding trust in other regions.
"In terms of infant formula, in the U.S. where we don't play, look, we have no plans there at the moment." — Philipp Navratil (CEO)
Vertuo's role and patents
Q (Jeff Stent · BNP Paribas): How much of Nespresso growth comes from Vertuo and when might Vertuo compatibles appear as patents expire?
A: They said most current Nespresso growth comes from the Vertuo line, especially in the U.S. and Canada, and they are investing behind Vertuo with new machines and marketing. Some Vertuo patents remain but compatibles may appear eventually; they are preparing and focusing on building Nespresso as a lifestyle brand.
"Most of that growth comes today from the U.S. and Canada, where we still see strong growth on the back of that system." — Philipp Navratil (CEO)
U.S. inventory mix and marketing spend
Q (Tom Sykes · Deutsche Bank): Is Amazon-driven channel mix hurting inventory-to-sales and how healthy are non-Amazon retailers? Will core marketing spend be cut to fund growth platforms?
A: They said they are not cutting core marketing; additional CHF 600 million funds growth platforms while maintaining core investment and often these investments help both buckets. On inventory the issue was existing customers reducing safety stock, not a harmful mix shift to Amazon, and they view it as a one-off adjustment rather than systemic.
"What's going on here is quite different. It's our existing customers reducing their levels of inventory." — Anna Olive Manz (CFO)
cost inflation and H2 RIG outlook
Q (Celine Pannuti · JPMorgan): How do you see full-year cost inflation (coffee, cocoa, energy, milk) and will pricing decelerate? Also asked whether demand and RIG will be tougher in H2.
A: They said they will not quantify COGS inflation because costs (especially oil) move frequently; cocoa and coffee are tailwinds while Middle East-related costs are a smaller headwind. They will take pricing where consumers can tolerate it, keep driving cost savings and invest in innovation; they expect less pricing and more RIG over time and feel confident about RIG given improving momentum despite some tougher comps and one-offs.
"I'm not going to quantify what that means in terms of COGS inflation because, frankly, it moves around a lot, almost every time I check the news, oil prices move." — Anna Olive Manz (CFO)