Nestlé Posts Largest Single-Day Surge Since 2008, Q3 Sales Surpass Expectations, Plans to Cut 16,000 Jobs

TradingKey - Food industry giant Nestlé announced on Thursday better-than-expected financial results and a plan to cut 16,000 jobs over the next two years, representing about 6% of its workforce. This move aims to boost performance and restore investor confidence through a massive restructuring. Additionally, the company raised its cost-saving target by the end of 2027 from 2.5 billion Swiss francs to 3 billion Swiss francs.

On Thursday, Nestlé's stock surged more than 8% on the Swiss Exchange, marking its largest single-day gain since 2008. This rally also lifted related European stock indices, with the STOXX Europe 600 Food & Beverage index up 3.17% at the time of reporting.

The financial report revealed that Nestlé's sales for the first nine months of the year reached 65.87 billion Swiss francs, with an organic growth rate exceeding expectations at 3.3%. All regions and global direct-reporting businesses achieved positive growth, with Q3 organic growth reaching 4.3%, up from 2.9% in the first half. This was mainly driven by price increases in the coffee and confectionery categories.

Nestlé CEO Philipp Navratil stated that the group has been ramping up investments to boost real internal growth rates (RIG) and drive business growth, with initial results already evident.

Nestlé maintained its previous outlook for the full year 2025, expecting improved organic sales growth and a base trading operating profit margin of no less than 16%.

In fact, Nestlé is currently facing multiple challenges. In September, former CEO Laurent Freixe was dismissed after just one year due to a scandal involving a romantic affair. Analysts suggest the new leadership team needs to regain investor trust.

Furthermore, due to poor performance, Nestlé's stock has fallen 9% over the past year and more than 40% from its 2021 peak, facing pressure from investors. Investors are particularly focused on Nestlé’s underperforming vitamin brand and bottled water business.

Navratil stated that Nestlé "will be rigorous in our approach to resource allocation, prioritising the opportunities and businesses with the highest potential return."