By Anthony Shevlin 
 

Danone SA (BN.FR) said Wednesday that reported sales in the third quarter fell as a result of negative currency effects, but the company confirmed its full-year guidance and said it's prepared for currency headwinds.

The French company said sales in the three months ending Sept. 30 were 6.19 billion euros ($7.17 billion), compared with EUR6.47 billion the year previous. Although sales fell 4.4% on a reported basis, Danone said like-for-like sales grew 1.4%.

Like-for-like sales in the company's waters business rose 6.4% to EUR1.27 billion but its specialized nutrition business posted a decline in China, after 12 months of "exceptional growth."

Analysts at Bernstein had expected the slower birth rate in China to hit the business.

The ongoing consumer boycott in Morocco also affected Danone's essential dairy and plant-based international business, which posted flat sales on a like-for-like basis.

Danone's sales were hit by the devaluation of currencies in emerging markets, driven by the appreciation of the euro against the Turkish lira, Argentinian peso and Brazilian real.

Danone Chief Executive Emmanuel Faber said: "We have the foundations in place to navigate current emerging-market volatility and currency headwinds, which will enable us to continue to deliver sustainable profitable growth."

Danone confirmed its full-year guidance and targets double-digit recurring EPS growth at constant exchange rates, excluding the sale of Yakult. The company said its full-year guidance doesn't take into account the application of hyperinflation accounting in Argentina from July 1.

Danone said it expects market volatility to continue and sees inflationary conditions in raw materials such as sugar and fruits.

 

Write to Anthony Shevlin at anthony.shevlin@dowjones.com; @anthony_shevlin

 

(END) Dow Jones Newswires

October 17, 2018 01:47 ET (05:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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