By Aimee Look

Nestle said it plans to offload its ice-cream business, as the Swiss food giant slims down its structure to focus on four main categories.

The maker of KitKat chocolate bars and Nescafe coffee is pursuing a turnaround under recently appointed Chief Executive Officer Philipp Navratil after a string of snags, weaker-than-expected results and two abrupt CEO changes in a year have shaken the company. The group is also looking to move past a crisis that engulfed its infant-formula business and prompted product recalls across the industry.

Nestle said Thursday that it would sell its remaining ice-cream operations to its Froneri joint venture, and offload its waters and premium beverages arm--housing brands like Perrier and San Pellegrino--by 2027. The moves are part of a broader overhaul to structure the company around four businesses--coffee, petcare, nutrition, and food.

Shares rose 3.7% in early morning European trading.

The company said it would integrate its nutrition and health-science divisions into one business, and that the head of the health-science unit, Anna Mohl, would leave her position.

Nestle had previously signaled some of its businesses could be on the block, and launched strategic reviews of its vitamins and water units before Navratil took the helm.

In October, the CEO said he would be discerning and not shy away from looking at new areas to trim as he laid out plans to slash 16,000 jobs.

Some consumer conglomerates--like rival Unilever--have spun off businesses or voiced plans to shed brands. Unilever in December completed a spinoff of its ice-cream business, forming Magnum Ice Cream. Keurig Dr. Pepper last year struck a deal to buy Peet's Coffee owner JDE Peet's and outlined plans to separate its coffee and beverage units. British multinational Reckitt agreed to sell off a portfolio of home-care brands in July 2024.

The strategic overhaul at Nestle comes as Navratil gains his footing at the company. He previously led Nespresso and was promoted to the top role to replace former CEO Laurent Freixe, who was ousted after an undisclosed romantic relationship with a direct subordinate. But the start of his tenure has been marred by infant-formula problems after a tainted ingredient triggered a series of worldwide recalls by the Swiss company and peers like France's Danone.

Navratil said in a call with reporters that the recall was complete and that the company was running factories around the clock to keep up with supply.

What began as a precautionary recall due to the presence of cereulide bacteria--a toxin that can cause nausea and vomiting in infants--has ballooned into a full-blown crisis affecting products in more than 60 countries.

Nestle said it expected the infant-formula recall to weigh on sales growth this year. It forecast organic sales growth of 3% to 4%, including a 0.2 percentage-point hit from the recall, but cautioned that it could end up at the lower end of the range due to uncertainty about potential additional impacts.

For the fourth quarter, Nestle reported on-year organic sales growth of 4%, driven both by higher prices and volumes, following a 4.3% rise in the third quarter. This beat analysts' estimates of 3.4%, according to a consensus compiled by the company.

Overall sales for 2025 as a whole were 89.49 billion Swiss francs ($115.75 billion) compared with 91.35 billion francs the year before. Analysts had expected 89.69 billion francs.

Net profit declined 17% to 9.03 billion francs, while underlying trading operating profit--Nestle's preferred earnings metric--fell 8.4% to 14.39 billion francs as the company invests in driving its top line.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

February 19, 2026 03:42 ET (08:42 GMT)

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