(Bloomberg) -- Danone SA posted buoyant quarterly revenue growth as the French company sold more products rather than relying on price hikes.
Sales rose 4.2% in the third quarter, the Volvic and Activia maker said, beating the 3.8% expected by analysts. It has beat top-line sales expectations every quarter since early 2021.
The shares rose as much as 2.6% in early trading in Paris Thursday.
The results announced Thursday show “real evidence of all the work that the company is doing to bring back sustainable volume growth,” Barclays analysts said in a note.
The company benefited during the quarter from selling more items as well as from shoppers switching to pricier variations, while the impact of higher pricing diminished.
Big consumer goods companies relied on price hikes to boost revenue during the recent high-inflation period. This year they’ve been trying to return to growth through higher volumes. But some have been more successful than others, with Nestle SA, for example, cutting its full-year growth outlook in two consecutive sales updates.
Danone’s water and dairy and plant-based units have benefited from a trend toward healthy eating, particularly in the US, where the adoption of GLP-1 obesity medications has led to high-protein yogurt “flying off the shelf,” said Juergen Esser, the company’s deputy chief executive officer in charge of finance.
Still, Danone’s fastest-growing unit for the period was specialized nutrition, which includes infant formula as well as food designed for cancer patients and the elderly. Danone said earlier this year it will invest in the medical nutrition portion of the business, betting that an aging population will spur demand — part of the next stage of Chief Executive Officer Antoine de Saint-Affrique’s turnaround. De Saint-Affrique has made small changes to the group’s portfolio and streamlined operations.
On Thursday, the yogurt maker also confirmed its 2024 guidance of like-for-like sales growth expected between 3% and 5%, with moderate improvements in recurring operating margin.
--With assistance from Jenny Che.
(Updates with analyst quote, shares from third paragraph.)
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