The Swiss company Nestle has revised its forecast for sales growth for the current financial year, reducing it from 4% to 3%, Kommersant reports.
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The decision follows the first six months of the year, which showed less optimistic results than expected due to lower prices for goods in stores. In an inflationary environment over the past few years, Nestle and other manufacturers have increased the prices of their products to maintain profits amid rising costs. However, this led to consumers increasingly choosing more affordable brands, and the company had to limit further price increases to restore sales volumes.
Last year, Nestle increased prices by an average of 7.5%, while over the past six months this figure was only 2%, which was lower than analysts' forecasts. The company's reporting highlights that prices fell faster than expected in the first half of the year, which could lead to lower annual sales growth.
At the end of the half year, Nestle's net profit amounted to $6.37 billion, which is slightly lower than analysts' forecasts. Sales fell 2.7% to $52.6 billion, slightly above forecasts. Nestle shares react to the publication of financial statements and annual forecasts by falling by 5.1%. Since the beginning of the year, their decline has exceeded 10%.
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