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French group Danone's third-quarter sales growth slows on China and Morocco woes

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French group Danone's third-quarter sales growth slows on China and Morocco woes
FILE PHOTO: The logo of French food group Danone is pictured during the company's 2017 annual results in Paris, France, February 16, 2018. REUTERS/Pascal Rossignol   -   Copyright  Pascal Rossignol(Reuters)
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PARIS (Reuters) – Danone <DANO.PA> said sales growth slowed sharply in the third quarter, reflecting falling sales of its infant formula products in China due to challenging year-ago comparables, and due to lost dairy sales stemming from a consumer boycott in Morocco.

Warm weather in Europe, however, lifted sales at its water division while there was a decent performance at its dairy and plant-based business in North America, where Danone is integrating organic food group WhiteWave, and Danone kept its full year financial goals.

Danone, the world’s largest yoghurt maker with brands including Actimel and Activia, said third-quarter sales reached 6.186 billion euros (£5.42 billion), marking a like-for-like sales increase of 1.4 percent – slightly above analysts’ forecasts for 1.2 percent growth.

Nevertheless, this marked a sharp slowdown from 3.3 percent growth in the second quarter and 4.9 percent in the first quarter.

Danone, which is targeting an operating margin above 16 percent and like-for-like sales growth of 4-5 percent by 2020, reiterated its expectation for a double-digit rise in 2018 underlying earnings per share (EPS), excluding the impact of the sale of a stake in Japan’s Yakult.

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)

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