Higher prices lift Danone third-quarter sales

By Dominique Vidalon

PARIS, Oct 28 (Reuters) - Danone reported better-than-expected organic sales growth for the third quarter on Wednesday as price increases helped offset rising costs, though weakness in its Mizone water brand in China weighed on volumes.

The French consumer goods group, whose brands include Evian and Badoit water and Activia yogurt, maintained its 2026 full-year targets.

Its shares rose nearly 3%, with JPMorgan analysts describing the results as reassuring on major profit drivers including Specialised Nutrition in China and European dairy.

"In an environment that remains volatile, we reiterate our full-year guidance with confidence," CEO Antoine de Saint-Affrique said in a statement. 

Third-quarter sales reached €7.233 billion ($8.04 billion), a 4% rise on a like-for-like basis, compared with expectations of a 3.7% rise in a company-compiled analysts' consensus.

Overall prices rose 3.6% while volumes were up just 0.4%, the company said.

Finance chief Juergen Esser told analysts that the company raised prices selectively in Europe and the US as oil prices soared over the northern hemisphere summer.

"We have not seen any significant price elasticity," Esser said, referring to the impact of the price hikes on demand.

MIZONE WATER BUSINESS WOES

In Asia Pacific, like-for-like sales growth was 3.6% with a sustained growth in Specialised Nutrition and in Essential Dairy Products. However, inventory adjustments prompted by adverse weather hurt Danone's water business in China, with weakness in Mizone reducing group like-for-like sales growth by one percentage point in the quarter.

Esser said Mizone's impact should ease in the fourth quarter, noting the seasonal nature of the brand.

In the Americas, like-for-like sales growth was 4.4%. In Essential Dairy Products, high-protein products continued to drive growth across the region.

Esser said Danone was continuing efforts to revive its North American dairy business through new leadership and a stronger product pipeline including gut-friendly products like kefir.

The company reiterated its 2026 guidance in line with its mid-term aims of like-for-like sales growth of 3% to 5%, with recurring operating income growing faster than sales.

($1 = 0.8993 euros)

(Reporting by Dominique Vidalon;Editing by Tomasz Janowski and Emelia Sithole-Matarise)