Nestlé reported first-half 2025 organic sales growth of 2.9%, slightly above expectations, but real internal growth turned negative in the second quarter. Weak consumer sentiment and pricing growth of 3.3% in Q2 affected performance. Greater China sales declined by 4.2%, prompting management to address distribution strategies. Coffee and confectionery prices increased, but challenges persist in the US and China.

Despite short-term challenges, Nestlé’s fair value estimate remains at CHF 92 with a 20% upside potential. The trading operating margin was 16.5%, beating consensus, but expected to decline in the second half due to inflation and currency pressures. The company is focused on marketing investments and performance improvements to drive long-term growth.

Read more at Morningstar: Pressure in Greater China and Pricing Are Short-Term Headwinds