French yogurt maker Danone (DANOY) has upgraded its forecast for its operating profit margin this year because of growth in China in an unscheduled release.
It now expects an operating profit margin of between 50 basis points and 60 basis points higher for the full year. The company was previously targeting "solid improvement."
The world's biggest yogurt maker said it still expects sales growth of between 3% and 5% for 2016.
The shares were down marginally this morning in Paris, trading at €60.51 ($67.99). They are up 2.2% on the year.
The owner of Evian water and Activia yogurts said, "With fast evolving dynamics in some emerging markets and notably China, we are adjusting the pace of topline refueling for 2016 in these specific geographies."
The company reported strong first-quarter sales of 3.5%, beating analysts' expectations of 3.2% growth. And Danone expects sales in the second quarter to increase further as dairy sales accelerate.
Danone is in the midst of relaunching its popular Activia yogurt and Actimel fermented milk products to boost sales.
In February, the company said warned of a tough trading environment as it expected the price of milk to go up and inflation to increase on sugar, plastic and fruit. The conservative outlook matches that of rivals Nestle (NSRGY) and Unilever (UL) .
Earlier this year rumors were that Danone would go after Mead Johnson (MJN) to expand its early-life nutrition market in the U.S. Danone's main brands of infant nutrition -- Nutrica, Cow & Gate, Aptamil and Nutrilon -- are not produced in the U.S. The deal could be worth $18 billion.