Lindt lowered its full-year sales outlook and indicated that it plans to cut prices across all products from January next year. It also revised down its growth outlook for the existing business as weak demand persists across Europe.
Swiss chocolate maker Lindt lowered its full-year sales outlook from the growth forecast issued in March to 0–2% growth, and announced plans to cut prices across all products from January next year. This is the second time this year that the company has lowered its full-year outlook. CEO Adalbert Lechner indicated that the company intends to reduce prices for Christmas products.
The company also lowered its sales outlook for the existing business from 4–6% growth year on year to 0–2%, while skepticism about a recovery in market demand remains strong. Shares fell as much as 9.4% in Zurich trading, the steepest intraday decline since the cut in March.
By region, weak demand in Germany, Switzerland and Austria, together with consumer behavior indicating greater price sensitivity, affected results. The summer heatwave across Europe is also viewed as having weighed on sales, while renewed increases in cocoa prices were cited as another factor pressuring profitability.
Market participants have suggested that the company's pricing power, which has supported its previous valuation levels, is being tested. Jean-Philippe Bertschy of Vontobel said that two downward revisions in six months would cast a shadow over the company's credibility.