Nomad Foods Leans on Innovation: Will it Reignite Top-Line Growth?

Nomad Foods NOMD is placing a strategic bet on innovation to revive its top line, following a first-quarter 2025 decline of 3%, 3.6% and 3.7% in total revenues, organic sales and volume, respectively. Amid industry headwinds like retailer destocking and shifting consumer value perceptions, the company is doubling down on product development, brand renovation and integrated marketing campaigns to regain momentum.

At the core of this effort is Nomad Foods’ aggressive push in its fish portfolio, which represents approximately a third of total revenues and remains margin accretive. This includes renovating its iconic fish fingers and introducing new lines like the United Kingdom’s Captain’s Discoveries and Italy’s relaunched Fish Bar sub-brand. 

These initiatives are not just aesthetic, they aim to reposition frozen fish for emerging consumption occasions, especially snacking, which Nomad Foods is now actively targeting. Early results in Italy are encouraging, fish retail sales rose 9% year over year in the first quarter, supported by innovation, impactful merchandising and strong media integration.

The company also aims to increase innovation as a percentage of sales in 2025. While it continues to face macroeconomic pressures, Nomad is maintaining the investment levels to support long-term brand development and product relevance. Management stated it will monitor the performance of innovation initiatives and apply learnings across markets, with the goal of supporting volume trends and enhancing relevance over time.

Peers Taking Parallel Paths With NOMD on Innovation

Like Nomad Foods, both Conagra Brands CAG and Lamb Weston LW are leaning on innovation to spark category growth. 

Conagra Brands is prioritizing product upgrades and modernizing its frozen offerings. But it is facing a complex macro backdrop. In the third quarter of fiscal 2025, the company reported a 6.3% revenue decline. Despite strong consumption, Conagra Brands continues to rely on innovation and brand investment to stabilize volumes and regain share.

Meanwhile, Lamb Weston is expanding its innovation footprint across foodservice and retail. The company recently launched fridge-friendly fries and new licensed snack formats, aiming to tap new usage occasions and freezer-less environments. Despite restaurant traffic softness, Lamb Weston grew volume by 9% in the third quarter of fiscal 2025 and sees innovation as a key lever in building long-term customer stickiness.

NOMD’s Price Performance, Valuation and Estimates

Shares of Nomad Foods have lost around 1.8% in the past month against the industry’s growth of 2.3%.

From a valuation standpoint, NOMD trades at a forward price-to-earnings ratio of 8.04X, down from the industry’s average of 15.97X.

The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings per share implies year-over-year growth of 4.6% and 7.3%, respectively. 

NOMD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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