Danone Beats Q1 Expectations on Robust Chinese Demand
Danone posted stronger-than-expected first-quarter sales growth, driven by surging demand in China for its Specialized Nutrition division. The French FMCG giant reported a 4.1% rise in like-for-like sales, outpacing analyst projections of 3.4%, and reinforcing strategic shifts taken under CEO Antoine de Saint-Affrique’s transformation plan.
Revenue for the quarter reached €6.79 billion, with the company pointing to China, Indonesia, and India as key growth markets. Specialized Nutrition led the charge, particularly with higher demand for infant formula. In China, a sharp recovery in birth rates, compared with the lows seen during the pandemic, has boosted demand for pediatric nutrition products, benefitting multinationals with strong brand equity like Danone.
Performance in EDP (Essential Dairy and Plant-Based) was more modest, growing 2.5% on a like-for-like basis. While the North American dairy segment faced consumer price sensitivity, plant-based offerings continued to perform in line with expectations. Meanwhile, the Waters division grew 5.6%, helped by strong performance in Europe linked to favorable weather conditions and pricing actions.
CEO de Saint-Affrique highlighted early signs of success in reshaping Danone into a more agile and consumer-centric organization. Since taking the helm in 2021, he has initiated a turnaround strategy focused on reinvestment in core brands, portfolio optimization, and regional prioritization. The company has divested non-core assets such as its dairy business in Russia and stakes in non-strategic ventures including another China-based dairy firm.
Investors noted Danone’s margin guidance remains unchanged for the year, with expectations of moderate full-year sales growth. Analysts from JP Morgan and Jefferies acknowledged the Q1 results demonstrated encouraging momentum, particularly in key emerging markets.
The strong quarterly showing reaffirms the importance of resilient demand in Asia for multinational FMCG companies navigating softer consumer trends in Europe and North America. As birth rates stabilize and channel dynamics normalize post-COVID, China remains a vital growth engine for global players in the infant nutrition space.