Setback in Danone’s sales growth following Asia infant formula recall

Danone said yesterday an Asian recall of infant formula had a worse-than-expected impact on its high-margin baby sales division in the third quarter and that sales in affected markets would not recover before next year.

The world’s largest yoghurt maker said it was cutting its sales, profitability, and free cash-flow goals for 2013. “Our priority is to get back on track for strong and sustainable growth in this region [Asia] as early as possible in 2014,” said chief financial officer Pierre-Andre Terisse.

Danone shares were down around 5% in early trading yesterday, the second- biggest losers in the French blue-chip CAC 40 index. The stock fell as low as €50.30, its lowest in nearly eight months.