Well I hope everyone reading this is having a great weekend so far, because I know one thing for sure - Nestle CEO, Mark Schneider, sure ain’t. 

(Source: Giphy) 

After a series of CEO Swaps that have gone about as viral as the latest TikTok dance, Mark Schneider (the first outsider to lead Nestle in over a century) just became the next victim of this 2024 phenomenon as he was just kicked to the curb with only 24 hours’ notice. 

(Source: Wall Street Journal) 

That’s right, no drawn out-farewell tour, no golden parachute ceremony, just a cold hearted “GTFO” from the board. Which is quite surprising considering the dude has been at the helm for over 8 years, leading Nestle’s stock to a peak of $133 in January of 2022. 

However, while it seemed like the guy could do no wrong, as he pivoted Nestle into high-growth areas like coffee and pet care, making analysts drool over his every move (including trimming off the fat by selling off Nestle’s slow growth businesses) - a string of earnings whiffs and strategic faceplants had his tenure unraveling faster than a cheap sweater (Turns out, jacking up prices during a global cost-of living crisis isn’t exactly good for business. Who knew?) 

(Source: Reuters) 

In short, Schneider’s rollercoaster of chaos has generated a peak -10.3% nosedive for Nestles stock in 2024, again, mainly due to Schneider’s obsession with hiking up prices faster than you can say “Great Value”. 

(Source: Yahoo Finance) 

This is clearly seen in Nestle’s latest underwhelming earnings report, with a -1.4% miss on EPS, while revenue growth remained as flat as a pancake - aligning with forecasts but definitely failing to impress. But when the company came out only projecting a growth rate of +3.5% over the next three years, slightly below the analysts’ industry forecasts of +3.8% - Schneider was no longer “The Guy” anymore, he was just a regular ole “has been” who couldn’t catch a friggin break.

(Source: Yarn) 

And now, Schneider is out, and Frenchman, Laurent Freixe, is officially in. But with that said, this isn’t Freixes first rodeo with Nestle. He’s basically a Nestle OG with nearly 40 years of experience under his belt - while successfully steering Nestle’s European zone during the 2008 financial crisis. Translation: If you can come out of 2008 unscathed, you’re technically a bada$$. 

(Source: Reuters) 

And apparently, investors think the same as Nestle’s stock jumped +5.67% on the news last week. However, while investors are showing signs of confidence that Freixe can right Schneiders wrongs, including revitalizing products that have rolled out more slowly than anticipated, analysts are divided on the outlook for the company. 

In short, Freixe is a sales guy, and his focus on boosting sales growth, rather than solely concentrating on profit margins has analysts side-eying his leadership more than my mom side-eyed my sudden interest of “studying” with the girl next door. 

(Source: Giphy) 

Some think his deep ties to Nestlé’s culture could be the secret sauce that brings stability back to the table. Others are worried that his focus on sales might come at the expense of profitability. Which is understandable, but let’s not forget that his experience in Latin America has seen strong growth, with organic sales up 2.1% in the first half of the year, outperforming the company’s overall figures. 

(Source: European Food Agency) 

So given this, as investors are watching Freixe like a hawk as he accepts this mission - the result might be a blessing for investors. Sure the initial firing of Schneider was unexpected and definitely sudden, but as we’ve seen, the market is clearly loving it. 

So with that, keep an eye on Nestle as we head into tomorrow morning’s opening bell. The pressure is definitely on for Freixe and Nestle, but just as Jean-Philippe Bertschy, an analyst at Bank Vontobel said, “If you look at successful food companies lately, like Lindt and Danone among others, they all have marketing and sales people as CEO,". 

(Source: Giphy) 

And considering these two companies (rivals to Nestle) are up +11.05% YTD and +17.71% YTD, well it’s music to Nestle investors’ ears right now. Translation: The punching air days for Nestle investors may be coming to an end… 

Now of course, only time will tell, but the main thing is, the CEO Swap Virus is alive and well, and maybe… just maybe, the next victim will be coming to the next piss poor company in your portfolio soon. (Looking at you, Intel)

(Source: Giphy) 

Stocks.News holds positions in Intel as mentioned in the article.