Nestlé (Malaysia) Bhd has seen its sales return to pre-boycott levels, according to local research houses, supported by festive spending and disciplined cost management.
Kenanga Research said the company’s revenue is now largely back to levels seen before the boycott impact, though part of the recovery has been driven by earlier price increases to offset higher commodity costs. The firm expects profit margins to stay below 2023 levels in the near term due to renewed cost pressures, but sees gradual improvement ahead as efficiencies and higher volumes kick in.
Nestlé Malaysia reported first-quarter sales for the period ended March 31, 2026, of RM1.88 billion, up 6.3% year-on-year. Domestic sales rose 7.4%, while exports grew 2.5%.
Chief executive officer Juan Aranols said performance was supported by consistent execution across channels and disciplined cost control. He noted that despite a volatile operating environment in 2026, the group remains confident in its fundamentals and ability to maintain continuity.
He added that Nestlé’s broad portfolio, strong local manufacturing base, and extensive distribution network continue to support resilience in a challenging environment. The company recorded pre-tax profit of RM271.9 million and net profit of RM205.1 million for the quarter.
The improved earnings were driven by stronger sales during festive periods such as Chinese New Year and Ramadan/Aidilfitri, cost discipline, operational efficiencies, and lower commodity prices for inputs like coffee and cocoa.
Analysts offered mixed views on the outlook. RHB Research maintained an optimistic stance, citing improving consumer sentiment, supportive fiscal measures, and cost discipline as factors supporting a “sustained resurgence.” It said Nestlé’s scale and global network could help cushion geopolitical and supply chain risks.
MBSB Research, however, was more cautious, saying the strong first-quarter performance may not be sustained throughout the year. It warned that rising freight, packaging, and commodity costs, along with geopolitical tensions, could pressure margins from the second quarter of 2026 onwards due to inventory lag effects.
Despite this, it acknowledged that Nestlé’s strong market position and efficiency initiatives should help limit volatility. The firm kept a “neutral” rating with a target price of RM95.70, citing fair valuations.
Hong Leong Investment Bank Research described the results as solid, with core profit after tax rising 9.4% year-on-year to RM188.3 million, representing 31% of full-year forecasts. It maintained a “buy” call with a higher target price of RM135, citing strong fundamentals and supply chain initiatives such as Farmer Connect.
The differing target prices reflect varying views on Nestlé’s ability to manage macroeconomic risks, including geopolitical tensions and commodity volatility. However, analysts agree that demand for staple food products remains resilient, supported by stable employment and wage growth.
Nestlé said its diversified portfolio, strong manufacturing footprint, and supply chain capabilities continue to support its outlook for another year of stable performance despite ongoing global uncertainty.
