Lindt's price hikes hit volumes even as European sales boost outlook
Despite this, CEO Adalbert Lechner said the maker of Lindor chocolate balls planned to raise prices again next year, albeit not as much as in 2025.
Shoppers continued to bear the brunt of high cocoa prices in the first half of the year as Lindt raised prices of its products by 15.8%. Its organic sales grew 11.2% in the period.
"Organic growth was exceptionally strong in Europe but relatively weak in North America. Assuming similar ... cocoa-price driven pricing in all regions, one wonders on the volume development in North America," analysts from Baader Helvea said in a note.
While Europe recorded organic growth of 17.7% in the first half, a weak consumer sentiment in North America weighed on sales there, resulting in just 3.6% growth.
The premium chocolate maker's shares fell around 7% by midday local time, on track for their biggest single-day drop since March 2020.
Lindt expects market growth in North America to accelerate in the second half of 2025, boosted by stronger orders, some of which it has already booked, Lechner told analysts in a conference call.
However, sales growth in Europe will likely normalize compared to the past six months, he added.
The company now expects organic growth of 9-11% this year, after previously guiding for 7-9%.
Lower volumes and high cocoa costs also weighed on its earnings, with half-year operating profit falling 11% to 259.2 million Swiss francs ($325.2 million), below market expectations based on LSEG data.
London cocoa futures (.LCCc2), opens new tab have nearly halved after reaching record highs in 2024, but remain clearly above the historical average.
Lindt continues to evaluate its global sourcing strategy ahead of the expected imposition of new U.S. tariffs on August 1, a company spokesperson told Reuters.
It had said in March it would supply chocolate made in Europe to Canada to avoid reciprocal tariffs on U.S. goods, but later said it had not adapted the strategy yet.
Lindt produces 95% of the chocolates it sells in the U.S. at its five factories in the country, which also supply less than half of the products sold in Canada.
($1 = 0.7970 Swiss francs)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
3 hours ago
- Reuters
Key elements of EU-U.S. trade deal agreed on Sunday
BRUSSELS, July 27 (Reuters) - The U.S. and the European Union agreed on a framework trade deal on Sunday, ending months of uncertainty for industry and consumers on both sides of the Atlantic. Here are the main elements of the deal: * Almost all EU goods entering the U.S. will be subject to a 15% baseline tariff, including cars, which now face 27.5%, as well as semiconductors and pharmaceuticals. The 15% tariff is the maximum tariff and is not added to any existing rates. * However, the U.S. is to announce the result of its 232 trade investigations in two weeks and decide separately on tariff rates for chips and pharmaceuticals. Whatever U.S. decisions come later on these sectors will be "on a different sheet of paper", European Commission President Ursula von der Leyen said. * The U.S. and EU will have zero-for-zero tariffs on all aircraft and their components, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. More products would be added. The situation for spirits is still to be established. * Tariffs on European steel and aluminium will stay at 50%, but von der Leyen said these would later be cut and replaced by a quota system. * The EU pledged to buy $250 billion of U.S. liquefied natural gas (LNG) a year for three years, totalling $750 billion in total, as it replaces Russian gas. The EU will also buy nuclear fuel from the U.S. * Under the deal, the EU pledged to buy U.S. military equipment and European companies are to invest $600 billion in the U.S. over the course of Trump's second term.
Reuters
3 hours ago
- Reuters
EU's von der Leyen: 15% the 'best we could get'
PRESTWICK, Scotland, July 27 (Reuters) - European Commission President Ursula von der Leyen defended the trade deal clinched with United States on Sunday as "the best we could get" and not to be underestimated given the looming threat of 30% tariffs that had been hanging over the EU. A baseline tariff rate of 15% on EU goods imported into the United States would apply to most goods including cars, semiconductors and pharmaceutical goods, von der Leyen said. Meanwhile, a zero-for-zero tariff rate had been agreed for certain strategic products, including aircraft and aircraft parts, certain chemicals, and certain generic drugs. No decision had been taken on a rate for wine and spirits, she added. Asked if she considered 15% a good deal for European carmakers, von der Leyen told reporters: "15% is not to be underestimated, but it is the best we could get." The European Union committed to purchasing $750 billion worth U.S. LNG and nuclear fuel over three years. "We still have too much Russian LNG that is coming through the back door," she said. The European Commission has proposed phasing out all Russian gas imports by Jan 1, 2028. "Today's deal creates certainty in uncertain times, delivers stability and predictability," von der Leyen told reporters before leaving Scotland.
Reuters
4 hours ago
- Reuters
EU's von der Leyen: trade deal delivers certainty in uncertain times
PRESTWICK, Scotland, July 27 (Reuters) - European Commission President Ursula von der Leyen on Sunday said a U.S. baseline tariff rate of 15% on imported EU goods would apply to cars, semiconductors and pharmaceutical goods. She also said that a zero-for-zero tariff rate had been agreed for certain strategic products, including aircraft and aircraft parts, certain chemicals, and certain generic drugs. No decision had been taken on a rate for wine and spirits, she added. "Today's deal creates certainty in uncertain times, delivers stability and predictability," von der Leyen told reporters before leaving Scotland.
