Stocksak: Food group Danone increases 2022 outlook after third-quarter sales beat expectations

© Stocksak. FILE PHOTO: The logo of French food group Danone can be seen at the company headquarters near Paris in Rueil-Malmaison on February 20, 2022. REUTERS/Gonzalo Fuentes

By Dominique Vidalon

PARIS (Stocksak), Thursday, French food group Danone raised its 2022 revenue forecast after beating analysts’ estimates for third-quarter sales. The firm was able increase prices to combat rising costs and beat analysts’ expectations.

Evian, Badoit Water and Activia yoghurt owners are now expecting like-for–like sales growth of 7%-8% in 2018, compared to a previous forecast that had been 5-6%.

It stated that it expects a higher recurring operating margin than 12%, compared to 13.7% last year.

Danone reported a 9.5% increase in third-quarter sales to 7.334 million euros ($7.35billion), which beat analysts’ expectations for a 6.9% growth in a poll they conducted.

This was also a sequential acceleration of 7.7% sales growth in the second quarter. It reflected strength across all businesses, particularly in China for baby food and bottled water.

CEO Antoine de Saint-Affrique took over in September 2021. He must devise a revival plan in the face of rising input costs and further uncertainties caused in part by Russia’s invasion in Ukraine. This led to plans for the group to lose control of its Russian dairy food business.

Third-quarter revenue growth was 10.9% due to price increases

Saint-Affrique released a statement saying that they will continue to implement pricing actions in a responsible manner. He also stressed the importance of reinvesting in their brands and capabilities.

He said that this was evident in the performance of Aptamil’s Specialized Nutrition business in Waters (NYSE):, where our Evian and Bonafont brands continue to perform well in the market, but also in Essential Dairy (EDP), with resilience of the portfolio, notably in Japan, the United States, Canada, and Japan.”

Rival Unilever Plc (NYSE:) Plc raised its full year sales forecast on Thursday, as it raised prices to offset rising costs.

($1 = 0.9974 euros)

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