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Food group Danone keeps goals despite weaker first-quarter sales

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By Reuters
Food group Danone keeps goals despite weaker first-quarter sales
FILE PHOTO: The logo of French food group Danone is seen at the company's headquarters in Paris, France, December 20, 2017. REUTERS/Charles Platiau/File Photo   -   Copyright  Charles Platiau(Reuters)

PARIS (Reuters) – French food group Danone kept its forecasts for a further rise in sales and profits this year although weaker demand for infant formula products in China and a consumer boycott in Morocco weighed on first-quarter sales.

Danone, the world’s largest yoghurt maker, said its first-quarter underlying sales had risen 0.8 percent to 6.138 billion euros (£5.32 billion).

The performance was broadly in line with a company-compiled median forecast, based on 18 analyst estimates, of 0.7 percent like-for-like growth in group sales, yet marked a slowdown from 2.4 percent growth in the fourth quarter of 2018.

For 2019, Danone reiterated it was targeting like-for-like sales growth of around 3 percent and an operating margin above 15 percent.

Danone announced last week the sale of Earthbound Farm.

Danone said the sale of Earthbound Farm, which it had obtained via the U.S. organic salad business it inherited from its 2017 acquisition of WhiteWave, would help it improve its recurring operating margin in 2019.

Danone added it was on track to deliver on its 2020 goals for an operating margin above 16 percent of its sales and like-for-like sales growth of 4-5 percent.

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)