Key Takeaways:
Nestlé's new chief is slimming down the world's largest food company after a 37% stock decline wiped out $177 billion in market value.
Nestlé CEO Philipp Navratil is cutting 16,000 jobs and shedding non-core brands to revive growth after the stock lost 37% since early 2022.
"Selling more portions, more cups, more servings every day will solve most of our issues from the past," Navratil, who took over in September 2025, said.
The company plans to save about 3 billion Swiss francs ($3.8 billion) by 2027 through the cuts, which represent roughly 6% of its total workforce. Nestlé is exploring sales of San Pellegrino sparkling water and its remaining Häagen-Dazs stake as it focuses on coffee, petcare, snacking and nutrition.
The turnaround is critical for a company that saw its market value shrink by about $177 billion from its December 2021 peak. Early signs are encouraging: real internal growth — a measure of volume-driven revenue — climbed 1.2% in April, sending shares up 5.9% in their best session since October 2025.
Navratil, a 25-year Nestlé veteran who previously ran Nespresso, is the company's third CEO in 13 months. He replaced Laurent Freixe, who was dismissed after an internal investigation found he had an undisclosed relationship with a subordinate. Before Freixe, the board ousted Mark Schneider in August 2024 after the stock fell 31% from January 2022.
The new CEO has moved faster than many expected. Nestlé is streamlining its portfolio around four core segments — coffee, snacking, nutrition and petcare — that Navratil believes can deliver high-single-digit revenue growth. Earlier this month, Nestlé agreed to fully acquire ready-to-drink meal maker yfood Labs, its first acquisition under Navratil. Yfood generated about 150 million euros in sales in 2025.
The L'Oréal Question
One unresolved issue is Nestlé's stake in cosmetics giant L'Oréal, valued at just under $47 billion. Some investors argue Nestlé should sell the stake and use the proceeds to buy back shares or pay down debt, which stood at 51.4 billion Swiss francs at the end of 2025. Chief Financial Officer Anna Manz called the L'Oréal stake "a very high-performing investment" and said execution on the turnaround plan will drive the share price.
Nestlé shares trade at about 18 times forward earnings, a discount to the five-year average of 23 times. The company faces headwinds from GLP-1 weight-loss drugs that threaten snack demand and geopolitical risks that could reignite inflation. Nestlé is targeting organic growth of 3% to 4% this year.
The turnaround has begun to reassure investors. Shares are up about 4% since Navratil replaced Freixe. The company has raised its dividend every year since 1996, paying out 3.10 Swiss francs a share last year for a yield of 3.94%. Wall Street forecasts annual free cash flow will rise to 12.9 billion Swiss francs by 2030 from 9.2 billion.
"We need to come back to this consistent delivery," Navratil said. "All of this has started and is under way, but we're far from done."
This article is for informational purposes only and does not constitute investment advice.
