Danone eyes better margins in 2023, Q4 sales top estimates

Shares in Danone SA rose on Wednesday after the French food products group reported better-than-expected fourth quarter sales that were fueled by higher prices.

Total sales during the three months to the end of December jumped by 12% on a reported basis to €7.01B (€1 = $1.0644), mainly driven by stronger pricing and positive foreign exchange effects that helped offset a decline in volumes. Bloomberg consensus forecasts had seen the number at €6.96B.

Danone’s move to make items more expensive comes as the maker of brands like Activia yogurts and Font Vella water faces a steep recent uptick in input costs. The elevated expenses weighed on recurring operating income in 2022, but the figure still inched up by 1.2% year-on-year to €3.38B, beating estimates.

“While 2022 was a year of unprecedented external challenges and volatility, for Danone it has also been a year of deep transformation and solid delivery,” said chief executive Antoine de Saint-Affrique in a statement.