Danone 1Q Sales Were Stronger Than Expected -- Earnings Review

By Giulia Petroni

Danone SA posted first-quarter sales on Tuesday. Here's what you need to know:

SALES: The French food company recorded sales of 6.24 billion euros ($6.78 billion) compared with EUR6.14 billion in the same period the previous year. Sales rose 1.7% on a reported basis and 3.7% like-for-like. A FactSet-compiled consensus had forecast sales at EUR6.17 billion in the quarter. Results also came ahead of the company's forecast--in February, Danone said it was expecting a sales loss of around EUR100 million in the quarter due to Covid-19, implying a flat performance organically.

WHAT WE WATCHED:

--GROWTH: Sales growth was stronger than anticipated as the China downside was offset by pantry loading benefits in Europe and North America in March and categories performance offsetting each other, according to Danone.

--WATERS: In the first-quarter, net sales were down 6.8% on a like-for-like basis. In China, sales declined by around 40% as expected, due to the previously anticipated impact of coronavirus on the on-the-go market demand and supply chain.

--GUIDANCE: Danone withdrew its 2020 guidance on recurring earnings per share growth, like-for-like sales growth and recurring operating margin due to uncertainty around the severity and duration of the virus crisis across its markets. The company said it expects the second quarter of the year to be significantly affected by global lockdowns.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

April 21, 2020 04:30 ET (08:30 GMT)

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