Swiss chocolate maker Lindt & Sprüngli has posted first-half organic sales of CHF 2.16 billion (€2.22 billion), in line with expectations, as customers bore the brunt of historically high cocoa prices.
Price increases in the mid-single-digit percentage range contributed to the 7% sales growth in the first six months of the year, the maker of chocolate bunnies and teddy bears said.
Analysts polled by LSEG were expecting sales of CHF 2.1 billion (€2.16 billion).
Lindt confirmed its full-year outlook for organic sales growth of between 6% and 8%, and said it expects its operating margin improvement to be at the upper end of the previous guidance for a 0.2 to 0.4 percentage point increase.
Europe Performance
The group's Europe segment increased sales organically by 9.3% to CHF 1.07 billion (€1.10 billion) in the first half. Growth was most pronounced in France, the United Kingdom, and Central and Eastern Europe, with double-digit growth, it said, while Italy, Germany, and Switzerland also showed solid growth.
The North America segment saw organic sales growth of 3.0% to CHF 794.6 million (€818.43 million), while the Rest of the World segment achieved organic sales growth of 10.0% to CHF 293.2 million (€301.00 million).
Price Increases
However, the maker of Lindor chocolate balls said it would need to hike prices further, as cocoa prices have more than doubled this year due to limited crop supply and are now higher than those of many metals.
The group also said it would launch a new share buyback programme of up to CHF 500 million (€515 million) from Aug. 2, to be concluded in July 2026 at the latest.
'With strong plans and activities ahead, the Group is confident that it will reach the sales objectives announced for the full year 2024,' Lindt & Sprüngli said in a statement. 'For the coming years, the Group continues to reiterate its medium- to long-term sales growth targets of 6–8% with an improvement in the operating profit margin of 20–40 basis points per annum.'
Analyst Viewpoint
Commenting on the group's performance, Warren Ackerman, an analyst with Barclays, said, "With inflationary price effects, sales volumes in the global chocolate market have either stagnated or slightly declined depending on the product category and market.
"Despite these market conditions, Lindt is continuing to grow market share in all key markets, as evidenced by their volume/mix of +0.9% in the challenging market environment."
Additional reporting by ESM
