Swiss food giant Nestlé saw its shares suffer their biggest intraday plunge since 2020 as weak North American sales and massive restructuring costs rattled investor confidence. The company also announced plans to sell half of its premium water business — home to brands like Perrier and San Pellegrino — as part of a sweeping portfolio overhaul.

According to Bloomberg, Nestlé shares fell as much as 7.3% during the trading session on July 23, reflecting mounting disappointment with the turnaround strategy spearheaded by CEO Philippe Navratil since taking the helm last year.

Nestlé’s second-quarter results showed Real Internal Growth (RIG) — a key metric that strips out pricing effects to measure actual volume increases — fell to -0.6% in North America, signaling that consumer purchases in the region are contracting. Company-wide RIG came in at 1.8%, while organic sales growth of 3.7% only marginally beat market expectations.

“Given how much the stock has rallied recently, the volume metrics didn’t meet investor expectations, and we’re seeing profit-taking,” said Warren Ackerman, an analyst at Barclays.

Navratil, who has been CEO for less than a year, faces the daunting task of simultaneously cutting costs, shedding underperforming businesses, and reviving sales volumes. Nestlé is in the midst of a major restructuring that will eliminate 16,000 jobs globally by the end of 2027, targeting 3 billion Swiss francs (approximately $3.4 billion) in cost savings over two years. As of end-June, the company had achieved 1.7 billion francs of those savings.

Nestlé’s first-half 2026 net profit tumbled 31% year-over-year to 3.4 billion Swiss francs (approximately $3.9 billion), battered by surging restructuring costs and the absence of asset-sale gains that had boosted the prior-year period. Revenue slipped 3% to 43.1 billion francs, as a 6% currency headwind from the strong Swiss franc overwhelmed 4% real sales growth in coffee and food-and-snack categories.

Water Business Joint Venture Formed

Nestlé also announced it has signed a deal to sell a 50% stake in its water business to U.S. private equity firm Platinum Equity for 3 billion euros (approximately $3.3 billion). The two parties will establish a 50-50 joint venture called Ferranel, valued at 4.9 billion euros (approximately $5.4 billion), to jointly operate premium water brands including Perrier and San Pellegrino. The joint venture is expected to officially launch in the first half of 2027.

The divestiture is part of Nestlé’s broader restructuring to refocus its portfolio around core brands. The water business has faced persistent market skepticism amid slowing consumption and ongoing regulatory investigations and lawsuits related to filtration and treatment practices at some facilities. In May, French authorities conducted on-site inspections at two Nestlé water sites in France.

According to European media reports, major investment firms including KKR and PAI Partners also participated in the bidding process for the joint venture but withdrew over disagreements on valuation.

“The separation creates a global company with the right structure to develop the water business, while allowing Nestlé to concentrate fully on other core segments like coffee, pet food, nutrition, and food-and-snacks,” Navratil told investors during a briefing.

Nutrition Unit Struggles and Recall Fallout

Nestlé’s nutrition business — another key pillar — is also under pressure. The lingering impact of last year’s infant formula recall continued to weigh on the segment, with organic growth declining in the first half. The company estimated the recall shaved approximately 0.9 percentage points off first-quarter sales growth and 0.3 percentage points in the second quarter. Nestlé expects to recover market share by the end of this year.

CFO Anna Manz noted that the impact of the Middle East conflict is most pronounced in the Asia-Oceania-Africa region. “We are deploying every response tool available to us, and we are consistently managing cost pressures as we did in the first half, so our existing profitability outlook remains intact,” she said.

Alongside the water business sale, Nestlé sold Blue Bottle Coffee in April and is actively pursuing divestitures of its underperforming vitamins business and its remaining ice cream operations. Whether this series of portfolio moves under Navratil’s “focus and concentrate” strategy can restore market confidence remains a key question for investors.