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Poor Q2 Earnings
Shares in French food giant Danone remain a little soft this week following a subdued Q2 earnings report. The French food group posted earnings per share of 1.55 in Q2. EPS estimates of 1.69 were missed as a result of a 57% drop in sales over the quarter.
Indeed, the drop-in sales were worse than the -3.3% reading the market was looking for. It has been attributed to a massive fall in out-of-home consumption which drove bottled water sales lower by 28%. Danone noted in its earnings report that its profit margin had fallen to just 14% of sales over Q1 2020. This is versus 14.7% over the same period last year.
The drop-off in performance was pegged to the COVID-19 pandemic which saw widespread global lockdowns over Q2.
Chairman and CEO Emmanuel Faber said he felt confident the quarter would be the “most challenging quarter of the year” and said: “the worst is behind us in terms of top-line growth”. Faber is now forecasting a sequential improvement in overall sales growth...
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