First-quarter profits indicated that manufacturers of everything from chocolate bars and coffee to lawnmowers and industrial robots were successful in passing on rising costs to customers, assuaging fears that higher prices might hurt demand.
Some of Europe’s top firms reported first-quarter sales growth, with Nestle (NESN.S), Danone (DANO.PA), and Akzo Nobel (AKZO.AS), the creator of KitKat, stating they were able to achieve the gains while hiking their pricing.
Despite rising prices, engineering firm ABB (ABBN.S) and gardening equipment manufacturer Husqvarna (HUSQb.ST) both reported solid demand.
Outside of Europe, Tesla (TLSA.O) outperformed Wall Street on Wednesday, as higher pricing helped buffer the electric vehicle manufacturer from supply chain instability and rising costs.
While the plan has boosted the stock prices of Nestle, ABB, and Akzo Nobel, it has also raised concerns about households’ ability to adapt and the prospects for the rest of the year.
Consumers are being squeezed by rising borrowing rates and lagging pay arrangements, as their disposable earnings drop and their shopping expenditures climb.
In a recent report, Berenberg predicted that “food and pricing and cost inflation pressure will be stronger and more persistent.”
“The sector outlook has deteriorated,” the bank continued. “However, grocery demand will be resilient, with outperformers emerging as inflation rises.”
Nestle, the parent company of Nescafe, was one of the winners on Thursday, claiming a 7.6% gain in organic sales in the first three months of the year, owing to strong pet food and coffee sales despite significant price increases. find out more
Thanks to price hikes of 5.2 percent, the metric, which excludes currency movements and M&A agreements, outperformed a 5.0 percent average prediction in a company-compiled consensus.
The Swiss corporation, whose brands include Purina pet food and Nespresso, said, “We increased up pricing in a reasonable manner and witnessed continuous consumer demand.”
