French Food Giant Danone Posts Strong 2025 Results, Eyes Growth in 2026

French food company Danone exceeded sales expectations for 2025, driven largely by strong baby formula demand in China. The company behind Evian water and Activia yogurt reported revenues of $32 billion and expressed confidence about its 2026 outlook despite ongoing global market volatility.

French consumer goods company Danone has reported financial results for 2025 that surpassed Wall Street projections, with the maker of popular brands like Evian water and Activia yogurt crediting strong baby formula sales in China for driving growth.

The Paris-based company announced revenues of 27.28 billion euros (equivalent to $32.07 billion) for 2025, representing a 4.5% increase on a like-for-like basis. This performance topped analyst forecasts of 4.4% growth.

Chief Executive Antoine de Saint-Affrique acknowledged current global market challenges but expressed optimism about the company’s direction. “We enter the year with confidence, aligned with the mid-term ambition we have set out,” de Saint-Affrique stated, despite describing the world as “volatile.”

The company’s strong showing came from robust sales of medical nutrition products and infant formula in the Chinese market, which helped compensate for declining coffee creamer sales in the highly competitive American marketplace.

Danone’s profit margins also improved, climbing to 13.4% of total sales in 2025 from 13% the previous year, matching analyst predictions exactly. The company generated cash flow of 2.8 billion euros, exceeding the 2.5 billion euro forecast, prompting management to announce a 4.7% dividend increase to 2.25 euros per share.

Looking ahead to 2026, company leadership projects sales growth between 3-5% on a like-for-like basis, with operating income expected to grow at a faster pace than revenues.

Fourth-quarter performance was particularly strong, with sales climbing 4.7% compared to analyst estimates of 4.3%. Again, Chinese demand for baby formula and medical nutrition products offset weakness in the U.S. coffee creamer segment.

However, the company faces potential challenges related to recent infant formula recalls linked to contamination concerns involving the toxin cereulide. Danone indicated the financial impact remains “not material” at this point, noting that “Impact assessment will be finalized once the recalls have been completed.”

While the recalls have been limited to European markets and haven’t affected Chinese operations, industry analysts worry about possible reputation damage in China, where Danone generates approximately 17% of its total profits from baby formula sales. This exposure is significantly higher than competitor Nestle, which derives less than 2% of profits from Chinese infant formula, according to Jefferies analysts.

Like other major consumer goods companies including Unilever and Nestle, Danone has moderated its price increases after three years of significant hikes following the COVID-19 pandemic. This strategy aims to attract back consumers who switched to lower-priced alternatives during the recent inflationary period.