Guidant Financial Group Blog

Most direct-to-consumer retail businesses are seeing a decline in revenue due to the unstable economy. Apparently, in a tight economy, consumers can live without just about everything.

It appears, however, that there’s one thing humans can’t live without.

Chocolate.

Maybe it’s because Americans are sitting on their couches, wallowing in their misery and stuffing their faces with bon bons and chocolate bars . . .

Or, maybe it’s because Europeans are alternating between biting their nails and biting off sweet pieces of a chocolate éclair while they wait to see if America’s mess will cross the Atlantic . . .

But, whatever the cause, Nestle (that trusted purveyor of chocolaty goodness) beat analyst’s expectations and posted a 6.1 % growth in first-half net profit (see Nestle's 1H Profits up 6.1 Percent).

Okay, okay. So Nestle doesn’t just sell chocolate. In fact, Nestle is the world’s largest food and drink company, owning such major brands as Nescafe, Perrier and (we’re not kidding) Jenny Craig.

A chocolate company owns Jenny Craig? Hmmm. How does that work?

Sorry, we digress.

The amazing thing about this story is that, despite rising fuel and raw material costs, the glutton-appeasing giant has continued to perform well. Since Nestle breaks down profits by the half, not by the quarter as most companies do, perhaps this means that the economic downturn isn’t so much a paradigm shift as it is momentary (albeit deep) pothole on the road of life.
One can hope. But if we really are in this down economy for the long haul, at least we can retreat into a chocolate haze to make our troubles go away . . . and Nestle’s investors fat and happy.