By Dominique Vidalon PARIS (Reuters) -Danone on Wednesday reported second-quarter sales that beat expectations, boosted by strong demand in China for infant milk formula and medical nutrition products
Danone Stock Rises 7% Following Strong Q2 Sales Driven by China Demand
By Dominique Vidalon
PARIS (Reuters) - Danone shares rose as much as 7% on Wednesday after it delivered second-quarter sales that beat expectations, boosted by strong demand in China for infant milk formula and medical nutrition products.
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)
(Reporting by Dominique Vidalon, Editing by Eileen Soreng and Clarence Fernandez)
