French food group Danone reported full-year 2025 results that exceeded analyst forecasts on both sales and free cash flow, and said cost savings helped raise its recurring operating margin. The group pointed to continued strength in China for medical nutrition and baby food as a key driver of performance, which largely offset weaker sales in coffee creamers in a competitive U.S. market.
Financial results and margin
Danone recorded 2025 sales of 27.28 billion euros, a like-for-like increase of 4.5%. That growth outpaced a company-provided analyst consensus of 4.4%. The recurring operating margin improved to 13.4% of sales from 13% in 2024, matching expectations of 13.4%. Free cash flow for the year reached 2.8 billion euros, above the analysts' projection of 2.5 billion euros.
Geographic and product dynamics
The company attributed much of its 2025 momentum to sustained consumer demand for medical nutrition and baby food in China. Those gains largely compensated for weaker results in its coffee creamer business in the United States, where competition weighed on performance. Danone highlighted some of its well-known brands, including Evian and Badoit waters and Activia yoghurt, as part of its consumer portfolio.
Recalls and regulatory uncertainty
Danone acknowledged investor pressure, similar to that faced by rival Nestle, to quantify the financial consequences of infant formula recalls linked to a contamination scare involving the toxin cereulide. The company said that, at this stage, the impact is "not material" and that "impact assessment will be finalized once the recalls have been completed."
Outlook for 2026
Looking ahead, Danone said its 2026 forecast aligns with its mid-term ambition of like-for-like sales growth of 3-5%, and that recurring operating income is expected to grow faster than sales. The company reiterated its financial targets without providing additional numerical adjustments. (Currency note: $1 = 0.8508 euros.)
Contextual note
The results reflect a combination of geographic demand resilience and internal cost measures that together supported margin expansion and free cash flow generation in 2025. The company continues to monitor the ongoing recall process and will finalize any impact assessment once that process concludes.