Danone shares shine after Q2 sales beat expectations thanks to strong China
That largely outpaced weakness in the water segment in Latin America due to rainy and cold weather in Mexico, and coffee creamer sales still sluggish in a competitive U.S. market.
The French consumer goods group, whose brands include Evian and Badoit water and Activia yoghurt, said second-quarter sales rose 4.1% on a like-for-like basis, beating expectations of a 3.8% increase in a company-provided analysts' consensus.
Danone's recurring operating income for the first half of 2025 was 1.811 billion euros ($2.09 billion), with a margin of 13.2% of sales against 12.7% a year ago.
The company reiterated that its full-year 2025 forecast was in line with its mid-term ambition of like-for-like sales growth of between 3% and 5%, with recurring operating income growing faster than sales.
The first-half performance reflected "the strength and resilience of our health-focused portfolio," said CEO Antoine de Saint-Affrique.
"The name of the game for us is performing consistently while transforming and fixing what needs to be fixed," he added, citing the plant-based business and coffee creamers in the United States.
By 0807 GMT Danone shares were up 6.6% at 70.72 euros.
"This is a reassuring update," Jefferies analysts said in a note.
"The notably strong beat in China Nutrition will quash worries that the category competitiveness is less favorable. It suggests that Danone continues to be a winner in this region, while others struggle."
China, North Asia and Oceania had another stellar quarter, with sales up 12.4% like-for-like. Specialized Nutrition recorded double-digit growth, driven by strong growth both in Infant Milk Formula and Medical Nutrition.
In North America sales rose 2.3% in the quarter, driven by double-digit growth in protein products such as the Oikos brand Greek yoghurt, while coffee creamers were progressively recovering following supply chain issues in the first quarter.
Danone has been using some of its cash for acquisitions to boost its focus on health and science, and build resilience to a volatile environment. It recently bought the Akkermansia Company, a Belgian biotics firm, and took a majority stake in Kate Farms, a U.S. plant-based maker of organic formula and shakes.
"We don't stop there," Saint-Affrique told analysts. "There are more acquisitions to come. We are working on a number of things."
($1=0.8654 euros)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
9 minutes ago
- Reuters
Japan trade negotiator to visit US to press for swift implementation of auto tariff deal
TOKYO, Aug 5 (Reuters) - Japan's top tariff negotiator Ryosei Akazawa said he planned to visit Washington from Tuesday to press the United States to have President Donald Trump sign an executive order to bring an agreed 15% tariff rate on automobiles into effect. The U.S. last month agreed in a trade deal with Japan to lower existing tariffs on Japanese automobile imports to 15% from levies totaling 27.5% previously. Duties that were due to come into effect on other Japanese goods will also be cut to 15% from 25%. "We will push the United States to make sure that an executive order be signed on the agreed tariff on automobiles and automotive components as soon as possible," Akazawa told parliament. Referring to the problem of "stacking" where goods can be affected by multiple tariffs, Akazawa also said Japan wants to make sure that goods that are already levied at more than 15% would be exempt from the additional 15% rate.
Reuters
39 minutes ago
- Reuters
Philippine annual inflation at 0.9% in July
MANILA, Aug 5 (Reuters) - Philippine annual inflation moderated to 0.9% in July from the previous month's 1.4% rate, helped by a slower rise in utility costs, the statistics agency said on Tuesday. The headline rate was the lowest reading since October 2019. Economists in a Reuters poll had expected an annual inflation rate of 1.1%, within the central bank's forecast range of 0.5% to 1.3% for the month. The annual core inflation rate, which strips out volatile food and energy prices, was 2.3% in July.
Reuters
2 hours ago
- Reuters
White House readies order to fine banks for dropping customers for political reasons, WSJ reports
Aug 4 (Reuters) - The White House is preparing an executive order that would fine banks for dropping customers for political reasons, the Wall Street Journal reported on Monday. The order directs bank regulators to investigate whether any financial institutions might have violated the Equal Credit Opportunity Act, antitrust laws or consumer financial protection laws, the Journal reported citing a draft text of the order. The order, which could be signed as early as this week, provides for monetary penalties, consent decrees or other disciplinary measures against violators, the report added. The order also directs regulators to strike policies they have that might have contributed to banks dropping certain customers and requires the Small Business Administration to review the practices of banks that guarantee the agency's loans, the Journal said. Reuters could not immediately verify the report. The White House did not immediately respond to a Reuters request for comment.
