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Lindt & Spruengli 2017 sales rise 4.8 per cent
[ ZURICH] Swiss chocolate maker Lindt & Spruengli on Tuesday reported a 4.8 per cent increase in 2017 annual sales in Swiss francs, but said the North American market remained tough.
Global chocolate confectionery demand was sluggish last year as consumers often preferred healthier snacks, but Lindt is outperforming the market thanks to its positioning in the faster-growing premium price segment.
Organic sales at the maker of Lindor chocolate balls increased by 3.7 per cent, below the Reuters poll average of 4.2 per cent, and outside the company's long-term target range of 6 to 8 per cent.
But a stronger euro during 2017 helped annual sales in Swiss francs increase to 4.088 billion Swiss francs (S$5.6billion), matching the figure expected by analysts. The group based in Kilchberg on Lake Zurich will report full earnings on March 6.
It kept its outlook of 6-8 per cent organic sales growth and increasing margins by 20-40 basis points.
The company described its performance as "good" coming amid largely saturated chocolate markets around the world and increasing pressure on prices.
Lindt said organic sales in Europe rose 6.2 percent, while growth increased by 12.4 per cent in the rest of the world.
But North America remained a headache, with sales falling 1.6 per cent in the market where Lindt advanced to the number three position in chocolate with its Russell Stover buy in 2014.
Lindt said Russell Stover, the maker of Whitman's Sampler boxes of chocolates, suffered a decline in sales, caused by a weaker market in general and difficulties experienced by some of its retailers, including drug stores and department stores.
Lindt has also been trimming Russell Stover's product lineup and cutting back on unprofitable promotions as it aims to turn around the business which has weighed on its overall performance.
A bright spot however was the expansion of Lindt's own retail outlets, with 50 new stores opened last year, taking the number of stores it operates globally to 410.
The chocolate maker known for its gold-foil-wrapped Easter bunnies has been expanding its retail offering to tap into the growing market for customers seeking a premium experience rather than just a simple chocolate bar.