Swiss chocolate maker Lindt announced plans to reduce chocolate prices due to weak consumer confidence and a revised sales outlook of just 0-2% growth. According to reports from Reuters, CEO Adalbert Lechner announced Christmas price cuts, fearing the company's reputation may be affected by the second sales-growth guidance reduction this year. The price cuts will extend beyond Christmas, with further reductions planned across all products from January 2027. As per Reuters, the company had to hike prices substantially due to historically high cocoa prices, which have risen by about 80% over the last six months alone. CEO Lechner explained that historically high cocoa prices forced the company to raise prices substantially, squeezing demand as shoppers became increasingly price-sensitive in the uncertain economic environment.
Lindt shares hit their lowest price since March 2021 in early trading, falling 6.6% and reaching the bottom of Europe's benchmark STOXX 600 index by 0820 GMT on Tuesday. This follows the earlier sharp decline of 8% on 29 September when the company first announced the guidance cut. As reported by Reuters, this marks the biggest single-day decline this year for the Swiss company. The stock is already down over 25% this year, reflecting investor concerns about the company's performance trajectory. Following the latest warning, Lindt shares opened more than 5% lower on Tuesday, demonstrating continued market pessimism about the company's prospects. Vontobel analysts noted that "a second cut within six months dents Lindt's reputation for reliable guidance, a key support for its premium valuation."
The company faces weak demand across several European countries, with Germany, Switzerland and Austria showing particularly tepid consumer demand. According to Reuters, Europeans bought less chocolate as temperatures broke records across the continent and after the company had to hike prices due to surging cocoa costs. CEO Lechner revealed that the European heatwave this summer reduced growth by roughly 1.5%, compounding the challenges from higher chocolate prices. The subdued mood led to weaker-than-expected order volumes in certain European markets, particularly in Lindt's seasonal products. The company's 2026 sales outlook has been revised downward from an earlier 4-6% guidance to the current 0-2% organic sales growth expectation, which is below the 3.9% market consensus cited by Vontobel.
Based on recent performance data, CEO Lechner revealed that Lindt's larger premium gift boxes and praline assortments saw the sharpest volume declines, while lower-priced products suffered less. This insight has prompted the company to adapt its packaging strategy, with greater emphasis on smaller items that encourage more frequent purchases and better align with consumer spending patterns. The warning adds to signs of pressure across the chocolate industry, with Swiss chocolatier Barry Callebaut forecasting a 1% decline in annual sales volumes in July. Despite the weaker sales forecast, Lindt maintained its guidance for a 20 to 40 basis point improvement in its 2026 operating profit margin and reiterated its medium-term targets for 6% to 8% organic sales growth and yearly operating profit margin improvements of 20 to 40 basis points from 2028 onwards.
Despite the weaker sales forecast, Lindt maintained its guidance for a 20 to 40 basis point improvement in its 2026 operating profit margin and reiterated its medium-term targets for 6% to 8% organic sales growth and yearly operating profit margin improvements of 20 to 40 basis points from 2028 onwards. CEO Lechner expects the company's cost-saving measures, adjusted pricing strategy and higher brand investments to improve demand and drive positive volume growth in 2027. The company does not plan job cuts, although it has implemented a hiring freeze, with Lechner adding that he expects the company's adjusted pricing strategy, higher brand investments, innovations and cost-saving measures to improve demand and drive positive volume growth in 2027.
