Nestlé S.A. has reaffirmed its 2026 financial guidance ahead of its half-year results announcement on 23 July, maintaining its outlook despite increased geopolitical uncertainty and macroeconomic risks.
In an aide-mémoire published on 26 June, the food and beverage group said it still expects organic growth of around 3% to 4% in 2026, with real internal growth accelerating compared with 2025. The company also reiterated its expectation that its underlying trading operating profit margin will improve and that free cash flow will exceed CHF 9 billion.
Nestlé reported organic growth of 3.5% in the first quarter of 2026, comprising 1.2% real internal growth and 2.3% pricing. The company said performance in its coffee business remained strong, although the contribution from pricing is expected to ease during the year.
The company also said the impact of its infant formula recall reduced first-quarter organic growth by around 90 basis points. Nestlé expects to fully recover from the disruption by the end of 2026 and said it is already seeing early signs of improvement.
The Middle East currently represents around 3% of group sales, with Nestlé cautioning that broader effects on commodity prices, distribution costs and consumer confidence remain uncertain. The company also expects foreign exchange to create an approximately 5% headwind on reported sales this year.
On profitability, Nestlé expects gross margin to improve during 2026, helped by lower coffee and cocoa costs later in the year, although tariff pressures remain a headwind in the near term. The company expects the full benefit of lower commodity costs to be realised in 2027 because of its hedging programme.
Nestlé also expects to deliver an additional CHF 0.9 billion in savings through its Fuel for Growth programme in 2026 after achieving CHF 1.1 billion of savings in 2025.
Regionally, the company reported first-quarter organic growth of 3.8% in the Americas and 3.9% in Europe, with Europe benefiting from growth in coffee and petcare. However, Greater China recorded organic growth of negative 10.6% as the company continued to reduce trade inventories and deal with the effects of the infant formula recall. Nestlé expects the inventory correction in China to be completed by the end of the second quarter.
Within its business units, Nespresso delivered organic growth of 5.1% in the first quarter, supported by volume growth in North America, while Nestlé Waters & Premium Beverages recorded organic growth of 3.3%, driven by North America and demand for international premium brands. The company also confirmed it is continuing to pursue a partial disposal of the Waters business and remains engaged with potential partners.
For the global FMCG industry, the update suggests that pricing remains an important contributor to growth, while commodity costs, foreign exchange movements and geopolitical developments continue to shape trading conditions for multinational food companies.
What happens next?
Nestlé will publish its full half-year results on 23 July 2026. Investors and industry observers will be watching for signs of recovery in infant nutrition, the performance of the China business and further details on the proposed partial disposal of Nestlé Waters & Premium Beverages.
