Danone Sees Up to €70 Million Hit From Baby Formula Recalls

Danone SA gave its first estimate of the potential cost of the recent recalls of infant formula over a contamination scare, saying it expects a €35 million to €70 million ($82.4 million) financial hit in the first quarter of the year.

“After that one-off impact, we should progressively go back to a normal situation,” Deputy Chief Executive Officer Juergen Esser said in an interview. “Therefore, we also confirmed this morning with lots of confidence our guidance for the full year.”

Most of the affected formula had already been sold and consumed last year by the time products needed to be pulled from shelves, so the company didn’t have many returns, Esser said. Some shops, however, took all products off shelves while they sorted which ones were subject to the waves of recalls, causing temporary shortages for customers.

Big formula producers Nestlé SA and Groupe Lactalis were also swept up in the contamination crisis following the discovery of the toxin cereulide, which causes nausea and vomiting, in some products.

Danone sees like-for-like sales growth of 3% to 5% in 2026, it said when reporting financial results on Friday. On a call with analysts, Esser estimated the impact from the recalls would amount to between 0.5% and 1% of net sales in the first quarter.

Danone shares were down 0.7% at 3:07 p.m. in Paris, after initially declining as much as 2.1%.

Estimates of the financial impact to Danone from analysts have ranged from tens of millions of euros to more than €1 billion.

Philipp Navratil, Nestlé’s CEO, criticized the Swiss company’s rivals on Thursday for moving slowly during the recalls — without identifying any by name. “We lost no time and decided to recall immediately,” he said. “We were surprised that others took longer to act.”

Esser said Danone is extremely responsible and would never take any risks on the issue. “As soon as the authorities changed the requirements, we went out and recalled what needed to be recalled.”