Lindt &Sprungli has cut its full-year sales forecast for the second time this year. This is a clear indication of the increasing pressures faced by the premium chocolate market. The Swiss chocolatier announced that weak consumer demand, increased price of chocolates and record high temperature during the European summers had contributed to the loss in sales, mainly in the major European markets.
After the recent revision, the group now expects “organic sales growth of roughly 02% for the year”, compared to an earlier forecast of 46%, far lower than the initial guidance. Lindt had already lowered its sales forecast in March, another indicator that consumers are becoming more cost conscious of buying higher priced chocolate products.
One of the major pressures has been the rapid increase in cocoa prices. Lindt has also been forced to raise prices to protect margins as very high cocoa prices boosted production costs. CEO Adalbert Lechner said that there had been around an 80% increase in the price of cocoa in the previous six months, a move, which has required significant pricing revisions. These price hikes have led to a decline in demand as European shoppers have become more cautious about the price they are paying for chocolate.
The effects of the economic recession have been most apparent in Germany, Switzerland, and Austria where. Lindt also commented that a number of their seasonal ranges have failed to reach expected order levels, in particular large premium gift boxes and praline displays. It seems consumers are more inclined to buy smaller boxes or lower-rated products when they are becoming more cautious about their spending.
Also contributing to the company’s performance has been the weather, with an extraordinary hot summer in certain parts of Europe causing consumers to pull back on their chocolate consumption, as the product is quite vulnerable to heat. While Lindt’s own ability to push prices was a contributing factor to this, they estimate the European heat wave cut into growth by 1.5%. Hot weather coupled with rising retail prices has been a very testing environment for chocolate sales.
Lindt has maintained its profitability guidance even amid the weaker sales forecast. It remains unchanged that the company expects to see a growth of 20-40 basis point inits operating profit margin for 2026 comparing with the previous year. But, the better performance in North America and other regions kept the company’s profit outlookhealthy to some extent and helped ease some of the weakness in Europe.
Lindt has now to adapt its strategy to evolve consumer behavior. It is considering to focus more on smaller packages and perishable items with more repeat purchasing at lower price level. It is also planning to increase investments in its brands and new products and cost reduction.
Lindt suggested it is expecting these factors and an environment of potentially better cocoa costs to contribute towards positive volume trends in 2027. Lindt has also instituted a freeze on new hires but stated that it has no current plans to implement job cuts.
Lindt’s medium to long term target is still running at 6-8% growth for organic sales a year and 20-40 basis points for operating margin every year from 2028. Last year’s sales was up to CHF 5.92 billion.
