Danone’s share price slid this morning (17 October) as third-quarter sales fell short of market expectations, with declining revenue in Spain and Italy weighing on group revenues.

The French food giant reported revenues of EUR5.26bn (US$6.9bn) in the three month period, a 9.3% increase on the prior year. On a like-for-like basis, sales climbed 5.6%.

On an organic basis, stripping out the effects of acquisitions and exchange rates, sales rose 5%, but fell short of consensus estimates of 6.1%. Danone’s stock fell 3.45% to EUR47.08 in early morning trading.

The maker of Actimel yogurt suffered “sharper” declines in its European fresh dairy division as conditions deteriorated in Southern Europe, particularly in Spain and Italy where sales were down by over 10%. Like-for-like sales in the unit, however, edged up 0.7%.

“In Europe, we need to adapt our model to the slump in consumption and to the needs of our consumers, while building new sources of growth. Our teams will pursue these priorities with determination,” the group said.

Danone reiterated its guidance for the year, forecasting operating margin to narrow by 0.5% on a like-for-like basis. Its target for sales growth also remains unchanged at 5-7% on a like-for-like basis.

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