Nestle shares rose 3% Thursday after the maker of Nescafé and KitKat reported organic sales growth for the fourth quarter that beat analyst forecasts.
The closely watched organic growth rate came in at 4%, beating a FactSet consensus of 3.55%. For 2026, Nestle said it is targeting organic sales growth of 3% to 4%, along with an improvement in its underlying trading operating profit margin, which stood at 16.1% in 2025.
The Vevey, Switzerland-based company also announced it was planning to sell its remaining ice cream business to Haagen-Dazs owner Froneri, a joint venture by PAI and Nestle.
In addition, Nestle said it started the formal process to shed its water business earlier in the first quarter, and expects the business, which holds brands such as Henniez and Perrier to be deconsolidated by 2027.
The company, under its new leadership duo of CEO Philipp Navratil and Chairman Pablo Isla, a former Inditex executive, have been focusing on streamlining the sprawling consumer giant, after years of operational and share-price underperformance.
“We are accelerating our strategy. We are focusing our portfolio on four businesses, led by our strongest brands, with prioritized resources and a simplified organization,” Navratil said in a statement.
An infant formula recall, which has also engulfed rival Danone and privately held Lactalis in France, has provided a stumbling block for restoring trust in the business.
Nestle said Thursday its organic growth guidance includes a negative 20 basis point impact from the recall and flagged 1.7 billion Swiss francs in restructuring items, mainly due to the recall.