Nestlé shares fell almost 7% on Thursday, the biggest drop since 2020, after the Swiss food group said sales disappointed and margin squeezed by high coffee and cocoa prices.

New chief executive Philipp Navratil and chair Pablo Isla have simplified the group’s sprawling structure and soldzinho parts of its portfolio, but the company’s operating profit margin guidance was downgraded. Sales volumes rose only 1.8% in the second quarter, below the 2% expected, and the margin fell 0.1 percentage points year‑on‑year to 16.4% in the first half, hampered by higher coffee and cocoa costs.

Operating profit fell 2.8% to SFr7.1bn, with additionaly from increased marketing spend, tariffs and a global infant‑formula recall. Despitestwa margin downgrade, revenue rose 3.7%, driven by 1.9% price hikes.

Nestlé also announced a multibillion‑euro joint venture with Platinum Equity for its water business, a 50‑50 partnership valued at €3bn that will bring together 30 brands in 120 countries, including San Pellegrino, Perrier and Acqua Panna.