TLDRShares of Nestlé plummeted more than 6.5% following a 31% decline in first-half earnings to CHF 3.47 billion.Restructuring charges and impairment costs drove the profit slump.The Swiss consumer goods giant announced a deal to sell 50% of its water division — featuring brands like Perrier and S.Pellegrino — to Platinum Equity for €3 billion, creating Peranel joint venture.While organic revenue climbed 3.6%, reported sales declined 2.5% to CHF 43.1 billion amid unfavorable currency movements.Analyst sentiment remained cautious, with Morgan Stanley maintaining a Sell recommendation before the earnings release.Shares of Nestlé (NESN) plunged over 6.5% during Thursday trading, reaching an intraday bottom of CHF 79.87, following the disclosure of a significant first-half earnings decline coupled with a substantial restructuring initiative involving its bottled water portfolio.Nestlé S.A., NSRGFThe Swiss multinational reported a 31.4% decline in net earnings for the first six months ending June 2026, totaling 3.47 billion Swiss francs. Company executives attributed the downturn primarily to impairment write-downs and restructuring expenses.Reported revenue reached CHF 43.1 billion, representing a 2.5% year-over-year decrease. However, this decline stemmed largely from adverse foreign exchange impacts — on an organic basis, sales advanced 3.6%. The operating margin contracted slightly to 16.4%. $NESN (Nestlé) H1 2026 Results Sales down on FX, but organic growth improving… CEO highlights steady progress despite uncertain environment ________________________________________ KEY METRICS (H1 2026) Reported Sales: CHF 43.1B (-2.5% YoY) Organic… pic.twitter.com/hMPBnYbMLW— Emmanuel – Big Tech & AI Investor (@EmmanuelInvest) July 23, 2026Although profitability took a substantial hit, company leadership upgraded its annual sales growth forecast. The market response, however, was decidedly negative.Accompanying the financial results was a long-anticipated strategic transaction. Nestlé officially announced it would separate its Waters & Premium Beverages division — encompassing iconic brands including Perrier, S.Pellegrino, Acqua Panna, and Nestlé Pure Life — into an equal partnership with American private equity firm Platinum Equity.The newly formed business entity, dubbed Peranel, carries a total enterprise valuation of €4.9 billion.The company anticipates receiving approximately CHF 2.8 billion in cash consideration upon transaction completion. The deal is expected to finalize during the first half of 2027, pending regulatory clearances.Water Unit Transaction Fails to Boost Investor ConfidenceThe water portfolio divestment was intended to signal strategic progress — representing a key element of CEO Philipp Navratil’s strategy to concentrate resources on faster-growing segments such as coffee and pet nutrition. However, the market’s lukewarm response indicated investors viewed the move with skepticism.The water brands had been considered peripheral to core operations for some time. Many analysts interpreted the transaction as a necessary rationalization rather than a genuine value-unlocking catalyst. Retaining 50% ownership rather than executing a complete sale further complicated the narrative.Adding to the headwinds, institutional sentiment heading into the earnings announcement was already subdued. Morgan Stanley had maintained its Sell recommendation on the shares in early July, with a price objective significantly below prevailing market levels. This bearish positioning established a pessimistic backdrop for the results.Corporate Transformation Remains IncompleteChief Executive Navratil and Chief Financial Officer Anna Manz have been implementing a comprehensive restructuring of the KitKat and Nespresso parent company following an extended period of subpar performance. Their strategy emphasizes volume expansion and streamlining the product portfolio.The stock currently trades at 18 times projected earnings — below its five-year historical average. While this valuation might appear attractive superficially, Thursday’s results underscored that the recovery trajectory remains uncertain.Nestlé’s 52-week trading band spans from CHF 69.90 to CHF 87.09. At Thursday’s session lows, shares were positioned approximately midway through that range.The broader Stoxx 600 index also declined 0.6% during the session, providing no supportive backdrop for the selloff.Nestlé’s intraday trough of CHF 79.87 represented its sharpest single-session decline in several months, as market participants recalibrated expectations regarding the timeline for a sustainable earnings rebound.The post Nestlé (NESN) Stock Plunges 6.5% as Restructuring Drives 31% Profit Decline appeared first on Blockonomi.