Strategic investments position the company for improved performance throughout the remainder of 2025

Nomad Foods Navigates Retail Destocking and Inflation, Reports Q1 2025 Results with Strong Margin Expansion

Despite revenue dip due to inventory adjustments and Easter timing, frozen food giant highlights robust gross margin growth and reinvestment, recalibrating full-year outlook amid macro uncertainties.

WOKING, England – Nomad Foods Limited (NYSE: NOMD), a leading European frozen food company with a significant presence in seafood, today released its financial results for the first quarter of 2025, ended March 31, 2025. The report reveals a period of strong gross margin expansion which facilitated increased reinvestment in strategic growth areas, although revenue was impacted by retailer destocking and the timing of Easter.

Key Q1 2025 Financial Highlights (vs. Q1 2024):

• Revenue: Decreased by 3.0% to €760 million.
• Organic Revenue: Declined by 3.6%, driven by a 3.7% volume decrease, partially offset by a 0.1% improvement in price/mix. This lag compared to retail sell-through is attributed to larger-than-anticipated retailer inventory destocking and the later Easter holiday.
• Gross Margin: Expanded significantly by 90 basis points to 27.8%, benefiting from supply chain efficiencies and the absence of prior-year inventory revaluation headwinds. This strong margin growth supported a double-digit increase in Advertising and Promotion (A&P) expenditure.
• Adjusted EBITDA: Decreased by 1.8% to €120 million, influenced by the aforementioned factors.
• Adjusted EPS: Decreased by 5.4% to €0.35.

Management Insights:

Stéfan Descheemaeker, CEO of Nomad Foods, commented, "Our team delivered a solid first quarter, executing well against our strategic priorities. We achieved another quarter of strong gross margin improvement, enabling continued investment in our Growth Platforms, strengthening our innovation pipeline, and supporting our leading brands. While we observed slightly positive in-market consumption growth, we faced more substantial retailer inventory destocking than expected, which, combined with the Easter timing, resulted in our net sales growth significantly trailing retail sell-out. We anticipate top-line growth to accelerate throughout the remainder of the year; however, we do not foresee recovering the larger-than-expected destocking-related losses incurred in Q1. Consequently, we have adjusted our full-year revenue expectations. Furthermore, despite no direct tariff impact at this time, the macroeconomic environment has become increasingly uncertain, and we anticipate further increases in some input costs. These dynamics, alongside the Q1 destocking impact, have led us to lower our full-year Adjusted EBITDA expectations while widening our Adjusted EPS guidance range."

Noam Gottesman, Co-Chairman and Founder of Nomad Foods, added, “Over the past two years, Nomad Foods has focused on strengthening its overall organization, scaling its innovation pipeline, and increasing both the quantity and quality of its advertising investment, while leveraging its strong cash flow to bolster its balance sheet and return cash to shareholders. While quarterly results can fluctuate, the European Frozen Food category remains healthy, Nomad Foods' leading brands are robust, and its portfolio is well-positioned to capitalize on evolving consumer trends. We maintain our confidence in the company's growth potential and believe the results for the remainder of 2025 will reflect this."

Revised 2025 Guidance:

Acknowledging the impact of greater-than-expected retailer inventory destocking, rising input cost inflation, increased macroeconomic uncertainty, and the strategic prioritization of continued brand and product reinvestment, Nomad Foods has revised its full-year outlook:

• Organic Revenue Growth: Now expected at 0%-2% (previously 1%-3%).
• Adjusted EBITDA Growth: Now expected at 0%-2% (previously 2%-4%).
• Adjusted EPS: Revised to a range of €1.82-€1.89 (previously €1.85-€1.89), implying growth of 2-6%, with the benefit of a lower share count partially offsetting the reduced Adjusted EBITDA outlook. Based on USD/EUR exchange rates as of May 2, 2025, this translates to a 2025 Adjusted EPS of $2.07-$2.15.
• Adjusted Free Cash Flow Conversion: Guidance remains unchanged at 90% or greater.

This report indicates that while Nomad Foods experienced a softer top-line in the first quarter due to external factors, the underlying strength of its gross margins and strategic investments position the company for improved performance throughout the remainder of 2025, albeit within a more cautious overall economic outlook.

editorial@seafood.media
www.seafood.media

Address:	Nomad Foods Forge 43 Church Street
City:	West Woking
State/ZIP:	Surrey, England (GU21 6HT)
Country:	United Kingdom
Phone:	+44 0 208 918 3200
E-Mail:	enquiry@nomadfoods.com
More about:

 

 

Print