Danone's China Sales Expected to Drive Growth as U.S. Performance Lags -- Earnings Preview

By Aimee Look

Danone is scheduled to report results for the third quarter on Tuesday. Here is what you need to know.

SALES FORECAST: The French food company, which makes Activia yogurt and Evian water, is expected to report a increase in sales for the third quarter to 6.87 billion euros ($7.98 billion) from 6.83 billion euros for the same quarter a year earlier, according to an analyst consensus compiled by the company. Like-for-like sales are anticipated to grow 4.3%, made up of a 3% rise in volume/mix--or amount and variety of goods sold--and a 1.4% rise in prices, the analyst consensus compiled by the company shows. In the third quarter of last year, sales increased 4.2%.

Shares in Danone gained around 20% since the start of the year through Thursday's close, and rose 6.9% during the third quarter.

WHAT TO WATCH

--CHINA: There is a sizeable opportunity in China for Danone's medical-nutrition portfolio, analysts at Barclays wrote in a note. The analysts said they have been bullish on Danone China for a while, calling it the best-positioned stock in Europe to take advantage of the country's Healthy China 2030 initiative, and amid the country's aging population and regulatory change. Danone has recently expanded its medical-nutrition factory in the city of Wuxi, in eastern China, a sign of its confidence, the analysts said. UBS analysts said momentum in the country for infant milk formula also remains strong, and the specialized nutrition category overall is Danone's key growth engine.

--U.S.: U.S. organic growth and market share is under pressure for Danone, and yogurt remains particularly uninspiring in terms of volume growth, analysts at Bank of America said in a note. Growth for the category is decelerating quickly, while creamer sales volumes remain in decline, and plant-based product volumes disappoint, the analysts said. The company's products are losing market share in the U.S., with the analysts noting that its products have lower shelf lives than local competitors. In Europe, the company's market share is also under pressure, the Bank of America analysts added.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

October 24, 2025 05:43 ET (09:43 GMT)

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