By Dominique Vidalon
PARIS, April 22 (Reuters) – Danone reported first‑quarter sales growth of 2.7%, above expectations but sharply slower than the previous quarter, as a baby-formula recall across Europe and supply disruptions linked to the Iran war weighed on its specialised nutrition business.
The French food group, whose brands include Activia yoghurt, Aptamil formula and Evian water, said that in an environment that remained “volatile and uncertain”, its health-focused and science-based portfolio provides some resilience.
Danone also kept its full-year guidance intact.
First‑quarter sales totalled 6.708 billion euros ($7.88 billion), representing like-for-like growth of 2.7%, compared with analysts’ expectations for a 2.6% increase. That marked a slowdown from 4.7% growth in the fourth quarter of 2025.
Danone reiterated its 2026 guidance in line with its mid-term aims of like-for-like sales growth of 3-5%, with recurring operating income growing faster than sales.
The war in Iran has disrupted supply chains, including shipments of baby formula imported from Europe that transit through the Middle East. Danone’s overall business in the region accounts for around 2% to 3% of net sales.
The baby formula recall has hit companies including Danone and Nestle in the first quarter due to possible contamination with the toxin cereulide, with investors keen to understand the extent of the financial and reputational impact.
Danone, which has recalled infant formula products across Europe and the Middle East, said its focus was to restore trust in the infant formula category as the recall situation was “going back to normal”.
The group is particularly exposed to the formula recall as around 17% of total profits come from infant formula in China, compared with less than 2% for Nestle, Jefferies analysts say.
The group reported an overall price increase of about 1.2% in the first quarter, while volume‑led growth was 1.5%.
However, Danone said its coffee creamers business, which has underperformed in the competitive U.S. market, was showing gradual improvement, helped by new product launches.
($1 = 0.8517 euros)
(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta and Louise Heavens)
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