Danone Earnings: Sales and Profit Beats but Guidance Reiterated

Danone's first-half results included like-for-like, or LFL, sales up 4% year over year, slightly ahead of company-compiled consensus of 3.9% growth. Within this, volume/mix was up 2.1% (up 2.9% in the second quarter), ahead of consensus (up 1.7%), while pricing was up 1.9% versus 2.2% for consensus. Volume/mix held up well across categories, driven by the waters division (up 3.2% in the first half, up 2.6% in the second quarter) and the good performance of Evian and Volvic. The group's largest business, EDP—essential dairy and plant-based products—achieved 1.7% volume/mix growth for the half-year period and 2.6% in the second quarter. This follows a positive 2% volume/mix performance in the fourth quarter from negative 0.8% in the third quarter and negative 3.3% in the second and first quarters of last year, reflecting good momentum in turning around the business. LFL sales for the specialized nutrition business increased 3.6% in the second quarter (solid up 7% in China, North Asia, and Oceania). Another positive highlight was that the China, North Asia, and Oceania region posted solid LFL sales growth of 8.4% year over year in the second quarter (8.6% in the first half), driven by momentum in specialized nutrition.