Danone’s stock shines after second quarter sales beat expectations thanks to strong China
By Dominique Vidaron
PARIS (Reuters) – Danone’s shares rose 7% on Wednesday after winning second-quarter sales, which was boosted by China’s strong demand for infant formulas and medical nutrition products.
The rain and cold in Mexico have far surpassed the weakening of the Latin American water segment, and coffee creamer sales are still slowing in the highly competitive US market.
The brand’s French consumer goods group, which includes Evian and Badowa water and Activia yogurt, said it had similarly rose 4.1% in the second quarter, beating expectations for a 3.8% increase in analyst agreement offered by the company.
Danone’s recurring operating profit for the first half of 2025 was 181.1 billion euros ($2.09 billion), a margin of 13.2% of sales versus 12.7% in the previous year.
The company has repeatedly reiterated that operating profit is growing faster and faster than sales, with a full year forecast of 2025, in line with a medium-term ambition of similar sales growth of 3% to 5%.
CEO Antoine De Saint-Affrique said his performance in the first half reflects the “strength and resilience of a health-centric portfolio.”
“The name of the game for us is consistently performing while transforming and fixing what needs to be fixed,” he adds, citing US plant-based business and coffee creamer.
0807 GMT Danone shares rose 6.6% to 70.72 euros.
“This is a encouraging update,” Jeffries analyst said in a memo.
“The particularly strong beets in China’s nutrition are worrying that the category’s competitiveness is less favorable, suggesting that Danone remains the winner in the region and others are struggling.”
China, North Asia and Oceania had another great quarter, with sales rising 12.4%. Specialized nutrition recorded double-digit growth resulting from strong growth in both infant and medical nutrition.
In North America, quarterly sales increased 2.3% with double-digit growth in protein products such as Oikos Brand Greek Yoghurt, but coffee creamers were slowly recovering in the first quarter following supply chain issues.
Danone uses some of the cash in its acquisitions to boost its focus on health and science and to increase its resilience to unstable environments. Recently, I bought Akkermansia Company, a Belgian biotics company, and acquired a majority stake in Kate Farms, a maker of US plant-based organic formulas and shakes.
“We won’t stop there,” San Afrik told analysts. “There are more acquisitions ahead. We’re working on a lot of things.”