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Chocolate maker Lindt posts on-target sales despite US slowdown
SWISS chocolate maker Lindt & Spruengli on Tuesday said its organic sales rose 5.1 per cent in 2018, in line with its "around 5 per cent" goal despite being hit by a slowdown in North America.
Reported sales, which include currency swings, rose 5.5 per cent to 4.31 billion Swiss francs (S$5.91 billion), as "strong increases" in its Europe and the Rest of the World regions compensated for problems in the United States, Lindt said.
The maker of Lindor chocolate balls and gold-foil wrapped Easter bunnies said its sales growth in North America slowed to 2.8 per cent for 2018, down from 4 per cent in the first half of the year.
The market environment "remained very challenging" with saturated chocolate markets in Europe and the United States, and retailers also faced rising price competition, Lindt said.
Chocolate makers have been grappling with slowing demand for their sweet treats, particularly in the US market where Lindt has needed more time to bring the Russell Stover brand up to speed.
Lindt said Russell Stover, the maker of Whitman's Sampler assortment boxes, reported a slight decline in sales during the year, while its Lindt USA and Ghirardelli businesses both reported overall sales growth, without giving further details.
Lindt said it expected the group's operating margin to be within its medium to long-term strategic target range for the 2018 financial year.
Expecting stronger future growth in North America, Lindt said it anticipated sales growth of 5-7 per cent in the mid- to long term and a steady improvement in the operating margin of 20-40 basis points.
"This should allow Lindt & Spruengli to continue to grow faster than average in all the markets," said the company based in Kilchberg on Lake Zurich.
Lindt will report full results on March 5. REUTERS