DANOY Danone (QX)

   By Joshua Kirby 
 

Danone on Wednesday said it expects to meet the upper end of guidance for the year after first-half sales and earnings came in above expectations.

The French yoghurt maker booked sales of 7.24 billion euros ($8 billion) in the second quarter, 6.4% higher than in the year-earlier period on a like-for-like basis. This beat analysts' expectations for EUR7.21 billion, according to estimates compiled by the company, and takes the total for the year's first six months to EUR14.17 billion in sales.

As with the first quarter, pricing drove sales growth in the latter three months, with volumes falling slightly on year, Danone said.

The group made recurring operating profit of EUR1.73 billion in the first half, with an operating margin that expanded slightly to 12.2%, just ahead of analysts' forecasts. Danone said it invested significantly in product and promotional spending in the period.

Danone, which lifted its guidance for 2023 earlier this year on the back of strong first-quarter sales, said it now expects to meet the upper end of a 4%-6% sales-growth range, like-for-like. It also expects to book moderate improvement in its operating margin.

Following the seizure of its Russia business earlier this month, Danone said it expects to book a cash impairment of around EUR200 million at the end of the year. Second-half results won't include the contribution of the Russia business, Danone said.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

July 26, 2023 01:47 ET (05:47 GMT)

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