Chocolate is getting more expensive, but people still buy it: bright sales, melting profits at Lindt

The victory of the premium segment

Lindt’s first half-year report exceeded analysts’ expectations: its revenue – calculated without currency effects – grew by 11.2%, reaching 2.35 billion Swiss francs, while experts had expected 2.30 billion. The growth in Swiss francs was also outstanding, at 9%, which is a remarkable performance in light of the strengthening Swiss currency and global economic uncertainties.

The company performed particularly well in Europe, where organic sales grew by 17.7%, while North America saw a 3.6% increase. Lindt says consumers remain committed to premium quality – despite the company raising its prices by an average of 15.8% in the first six months of the year.

Profits, however, have melted

Despite strong sales, Lindt’s after-tax profit fell by 13%, from 218 million francs to 189 million. This was mainly due to the previous price explosion of raw materials – especially cocoa – which the company partly passed on to customers, but which was still felt at the cost level. Although the world price of cocoa has already fallen by 38% this year compared to previous record highs, Lindt’s costs have only fallen by 11% so far.

The company’s management is nevertheless positive about the first half of the year. According to CEO Adalbert Lechner, the company delivered “strong results”, especially in a challenging economic environment. The unwavering loyalty of customers has enabled Lindt to raise its annual growth forecast from 7-9% to 9-11%.