Nestle Stock Slips After Chocolate Maker Replaces CEO

Nestlé SA shares fell in Swiss trading Friday, a day after the chocolate maker replaced Chief Executive Officer (CEO) Mark Schneider amid slowing sales.

Schneider, who also is resigning from the board, will be replaced on Sept. 1 by veteran company executive Laurent Freixe, who heads its Latin American operations.

During his eight years with Nestle, Schneider focused the Swiss firm “on high-growth categories like coffee, pet care and nutritional health products,” the company said.

But Nestle shares have fallen almost 10% this year amid declining sales as increasingly frugal consumers watch their spending.

UBS Says CEO Exit Isn’t Surprising Given ‘Negative Headlines’

In a note titled “The start of a new era?” UBS analysts said the replacement of Schneider wasn’t surprising given the Swiss firm’s disappointing “operational and share price performances” in the last two-and-a-half years, as well as “an unusually high number of negative headlines.”

During Schneider’s tenure, Nestle navigated multiple scandals, including an ongoing investigation in France after two children died eating frozen pizza contaminated with E. coli.

Nestle shares slipped 1.2% to 88.40 Swiss francs in intraday trading Friday. Its American depositary receipts (ADRs), which trade Over-the-Counter (OTC), were up 4% about 30 minutes after the opening bell.