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Dow Jones Newswires: Danone bucks inflationary and supply-chain pressures with earnings beat

Danone SA’s shares soar Wednesday at market opening following a broadbased sales beat in the first quarter and reiteration of guidance for the full year despite inflationary and supply-chain pressures.

At 0742 GMT, shares trade 7.1% higher at EUR56.39.

The French food company’s
BN,
+7.49%

start to the year was marked by quarterly sales organic growth of 7.1%, mainly driven by price and volume/mix, which were up 4.9% and 2.2% respectively.

“1Q sales have beaten meaningfully, led by the specialized nutrition division, the health of which we see as critical to the profit and margin algorithm,” analysts at Jefferies say in a research note.

Danone also backed its 2022 outlook despite expected mid-teens inflation in the year and still assuming the reinvestment of 100% of the cost savings of its “local first” plan. This means the company will be “funding its revamp while peers may have to cut back on A&P [advertising & promotional spend] to protect margin outlooks,” Citi analysts say in a note.

Write to Giulia Petroni at giulia.petroni@wsj.com

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