Finance
Infant Formula Recall and Impact of Iran War Weigh on Danone Q1 Sales
Published by Global Banking & Finance Review®
Posted on April 22, 2026
3 min readLast updated: April 22, 2026
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Danone’s Q1 2026 like‑for‑like sales rose 2.7%, slightly above expectations but below Q4’s 4.7%, weighed down by infant formula recalls tied to cereulide contamination and rising costs linked to the Iran war.
Danone's quarterly sales slow as formula recall, Iran war disrupt supply
Danone Reports First-Quarter Sales Performance Amid Global Challenges
By Dominique Vidalon
PARIS, April 22 (Reuters) - Danone reported first‑quarter sales growth of 2.7%, above expectations but sharply slower than the previous quarter, as a baby-formula recall across Europe and supply disruptions linked to the Iran war weighed on its specialised nutrition business.
The French food group, whose brands include Activia yoghurt, Aptamil formula and Evian water, said that in an environment that remained "volatile and uncertain", its health-focused and science-based portfolio provides some resilience.
Danone also kept its full-year guidance intact.
Financial Results and Guidance
First‑quarter sales totalled 6.708 billion euros ($7.88 billion), representing like-for-like growth of 2.7%, compared with analysts' expectations for a 2.6% increase. That marked a slowdown from 4.7% growth in the fourth quarter of 2025.
2026 Guidance and Mid-Term Aims
Danone reiterated its 2026 guidance in line with its mid-term aims of like-for-like sales growth of 3-5%, with recurring operating income growing faster than sales.
Impact of Global Events on Supply Chains
Iran War and Supply Disruptions
The war in Iran has disrupted supply chains, including shipments of baby formula imported from Europe that transit through the Middle East. Danone's overall business in the region accounts for around 2% to 3% of net sales.
Baby Formula Recall and Market Impact
The baby formula recall has hit companies including Danone and Nestle in the first quarter due to possible contamination with the toxin cereulide, with investors keen to understand the extent of the financial and reputational impact.
Restoring Trust in Infant Formula
Danone, which has recalled infant formula products across Europe and the Middle East, said its focus was to restore trust in the infant formula category as the recall situation was "going back to normal".
Exposure to Formula Recall
The group is particularly exposed to the formula recall as around 17% of total profits come from infant formula in China, compared with less than 2% for Nestle, Jefferies analysts say.
Business Segment Performance
Price and Volume Growth
The group reported an overall price increase of about 1.2% in the first quarter, while volume‑led growth was 1.5%.
Coffee Creamers Business
However, Danone said its coffee creamers business, which has underperformed in the competitive U.S. market, was showing gradual improvement, helped by new product launches.
($1 = 0.8517 euros)
(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta and Louise Heavens)
Key Takeaways
- •Infant formula recall due to cereulide toxin expected to hit Q1 sales by €35–70 million, about 0.5–1 % of net sales (insurancejournal.com)
- •Danone shares dipped significantly following recall announcements, though China formula operations remained unaffected (investing.com)
- •CEO cautioned that prolonged Iran conflict could elevate food prices via higher energy, fertilizer, and shipping costs (in.investing.com)
References
Frequently Asked Questions about Infant formula recall and impact of Iran war weigh on Danone Q1 sales
1How much did Danone's Q1 sales grow?
Danone's first-quarter sales grew by 2.7%, slightly above analysts' expectations.
2What factors affected Danone's Q1 sales?
A recall of baby formula across Europe and the Middle East conflict negatively impacted specialised nutrition sales.
3Did Danone change its 2026 financial guidance?
No, Danone reiterated its 2026 guidance, aiming for 3-5% like-for-like sales growth.
4Which products were involved in the recall?
The recall affected baby formula products, with concerns over possible contamination with the toxin cereulide.
5Did Danone maintain its full year outlook despite the slowdown?
Yes, Danone kept its full year guidance intact despite the Q1 slowdown.
