Lindt & Sprüngli is currently experiencing its most challenging quarter in 17 years, largely attributed to substantial price increases implemented to offset rising cocoa costs. These hikes have led to a significant drop in sales volumes, with a 6.6% global sales decline and an over 15% decrease in Germany alone, Lindt's second-largest market after the United States. Despite an 8.1% rise in net profit to SFr726.7 million last year on sales of SFr5.92 billion ($7.62 billion), driven by a 19% increase in pricing, the volume/mix fell by 6.6%, and a "slightly" negative print is forecast for fiscal 2026.
The company had increased prices by more than 40% since 2021, and while cocoa prices have recently eased from record highs, they remain about 50% higher than three years ago. Other costs, such as energy, transport, and packaging, are also exerting pressure, making CEO Adalbert Lechner hesitant to cut prices earlier in the year. The impact of these price increases has been particularly acute in markets like Germany, where weak Easter sales accelerated the decision to reduce prices, and North America, which saw only 3.6% growth in the first half despite Europe's strong 17.7% organic growth.
The fallout from these pricing strategies has resulted in Lindt cutting its 2026 sales growth forecast to 4% to 6% from a previous estimate of 6% to 8%. The company's shares reacted negatively, dropping more than 11% to SFr10,750 on March 10, their worst day since October 1987. Geopolitical tensions in the Middle East, affecting consumer confidence and tourism, have also been cited by Lechner as a contributing factor to the reduced demand, particularly in travel retail locations. The company aims to return to volume-led revenue growth in 2027.
