Danone posted stronger-than-expected quarterly sales on Thursday, with all businesses delivering volume growth as the world’s largest yoghurt maker managed to raise prices to cope with higher input costs though at a slower pace than previously. This success highlights Danone’s ability to navigate dynamic market conditions and deliver strong results, affirming the optimistic Danone Sales Forecast.
The maker of Activia yoghurt, Evian water and Aptamil kept its goals for like-for-like 2024 sales growth of between 3% and 5%, with a moderate improvement in recurring operating margin.
Sales rose 4.1% like-for-like to 6.789 billion euros ($7.25 billion) in the first quarter, beating expectations for a 3.4% growth in a company-compiled consensus of 17 analysts.
Danone, like rivals Nestle and Unilever, sharply increased prices in the past two years to cope with higher commodities and supply chain costs.
Analysts and investors have, however, raised concerns this could lead retailers’ private label brands to capture market share, and Danone said in February price increases would be at a slower pace this year than previously.
Danone raised prices by 2.9% in the first quarter of 2024, compared to an increase of 4.3% in the fourth quarter of 2023.
Furthermore, in light of Danone’s Q1 performance, which reflects its strategic initiatives and market positioning, the company’s ability to capitalize on evolving consumer preferences through innovation and consumer-centric offerings is evident. Additionally, effective marketing strategies and distribution channels have played a pivotal role in fueling sales growth.
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