Nomad Foods: Is Its Resilience In Frozen Food Category Enough To Help Maintain Sustainable Cash Flows?

Nomad Foods’ recent earnings for Q1 2025 presents a mixed picture for the company’s current performance and future outlook. The primary takeaway is the resilience and adaptability of Nomad Foods as it navigates a challenging economic environment marked by retail inventory destocking and rising input costs. On the positive side, Nomad Foods has managed to maintain a relatively stable operational performance despite a 3% decrease in reported net revenues to EUR 760 million. The retail sell-through slightly increased by 0.2%, indicating some underlying consumer demand strength. The company achieved a 90 basis point expansion in gross margin year-on-year, at 27.8%, driven by productivity savings and the resolution of previous inventory revaluation challenges. This margin growth, along with achieved overhead savings, supports their increased investment in advertising and promotions (A&P). The company returned EUR 74 million to shareholders through share repurchases and dividends, marking a significant increase from the previous year.