Investing.com -- Danone shares rose Thursday after the company reported Q3 2024 sales of €6.83 billion, a 4.2% increase on a like-for-like basis, surpassing analyst expectations and driven by robust performance in North America and China.
Citi and Jefferies analysts highlighted the company's better-than-expected volume growth, noting that the results could support Danone's stock performance in the short term.
Volume and mix growth contributed 3.6%, while pricing added 0.7%, with the company confirming its 2024 guidance of 3-5% like-for-like sales growth.
North America was a standout, with sales up 5.8% like-for-like, led by double-digit growth in Coffee Creations and strong demand for yogurt and bottled water.
In China, North Asia & Oceania, sales surged 8%, driven by gains in specialized nutrition and early signs of recovery in the infant milk formula market, according to the company.
CEO Antoine de Saint-Affrique highlighted the company's focus on maintaining profitable growth amid challenging conditions.
"We continue to deliver broad-based quality growth, with both volume/mix and price positive in all categories," he said, adding that Danone remains committed to leveraging innovation to stay competitive.
Jefferies noted that Danone's U.S. creamers business has been growing in double digits but warned of future pricing pressure from competitors like Nestlé.
However, analysts viewed the strong infant formula recovery in China as a positive signal for future growth.
While Danone saw solid performance across most categories, the Waters (NYSE:WAT) segment missed some expectations due to poor weather in Europe and Mexico. Jefferies pointed out that waters grew just 3.2%, below consensus estimates of 4.1%.
Citi praised Danone's Q3 beat, noting that the results "confirm the positive narrative" heading into the end of the year, with improvements in the U.S. dairy segment and China helping offset other regional challenges.
Both firms expect the company to maintain its defensive strategy and focus on profitability moving forward.