Danone SA sales climbed in the third quarter, driven by higher prices and persistent demand for its protein-rich yogurts and fortified drinks. Like-for-like sales rose 4%, the producer of Oikos Greek yogurt said in a statement Wednesday, above the 3.7% estimate of analysts in a Bloomberg survey. Increased pricing added 3.6% to sales growth, a bigger share than expected, while volume-mix contributed only 0.4%.
The specialized nutrition unit showed the strongest jump in sales, topping estimates on strength in Asia and the Americas. Danone confirmed its guidance to increase like-for-like sales between 3% and 5% this year, with recurring operating income growing faster than sales. Chief Executive Officer Antoine de Saint-Affrique has led a turnaround over five years by shedding weaker businesses and expanding in areas like high-protein dairy and food for cancer patients. The rise of weight-loss drugs has spurred demand for protein-rich, gut-friendly products.
Still, weakness in the US has weighed on sentiment. Danone has struggled to keep up with demand for its high-protein yogurts as it fights to take market share from US-based Chobani. Saint-Affrique installed a new US leadership team to turn around its struggling plant-based and creamer businesses. Danone shares are down 20% this year, trailing rival Nestle SA and on course for their worst annual performance since 2020.
Earlier this year, Danone agreed to buy UK-based Huel, a maker of fortified protein powders and ready-to-consume drinks and meals popular with gym-goers. It also acquired Australian dairy company Made Group to expand its coconut water and protein shake offerings in Asia.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing