Danone Sales Rise as It Mounts U.S. Comeback — 2nd Update

By Aimee Look

Danone is charting a turnaround of its North American business, betting it can overcome manufacturing bottlenecks to bring U.S. volume growth in line with other regions.

The French food maker has invested heavily in its dairy business to meet booming demand in the U.S., including launching eight capacity-expansion projects across four factories since December 2025, said Juergen Esser, its finance chief and deputy chief executive.

But challenges have piled up. The company ran into customer-service issues when ramping up production on the new lines, he said.

"This has not been as smooth as we wanted it to be," Esser said in an interview.

Now, Danone is looking to take a page from its playbook in other markets where the company was able to fix volumes. Tasked with the turnaround is newly appointed U.S. boss Francois Lacombe, who previously oversaw a sales revival at Danone's dairy business in Spain.

Production setbacks have been the only limitation for Danone, and going forward they won't be an issue, according to Esser.

Danone posted 2.4% like-for-like sales growth for its North America business in the third quarter. Other consumer-goods conglomerates showed mixed results in the region for the quarter. Britain's Reckitt Benckiser Group slashed its outlook due to Lysol manufacturing issues in North America, while Swiss food giant Nestle gained on the revival of its snacking business in the region.

For its overall third-quarter results, Danone on Wednesday booked like-for-like sales growth of 4%. Analysts expected growth of 3.7%, according to company-compiled consensus estimates.

Danone needs to deliver on its plans for the dairy business in the fourth quarter to support an acceleration in growth next year, Barclays analyst Warren Ackerman wrote in a note.

The company's like-for-like sales growth in North America was entirely driven by prices, with volumes down. Danone increased prices for high-protein products that are benefiting from strong consumer demand, Esser said.

"That price increase will help us close the year in a good manner," he said. "But for the rest of the portfolio ... we have been very careful."

Danone is hesitant to increase prices in response to inflation, with the company looking to absorb higher costs through productivity gains, the CFO said. North America, its biggest region, is key in managing inflationary pressures.

The company also backed its full-year expectations of like-for-like sales growth between 3% and 5%.

Write to Aimee Look at aimee.look@wsj.com

(END) Dow Jones Newswires

October 28, 2026 12:27 ET (16:27 GMT)