Lindt Sales And Profit Fall As COVID-19 Hits Chocolate Appetite
Swiss chocolate maker Lindt & Sprüngli says that it expects its organic sales to fall by around 5% to 7% this year before bouncing back next year after coronavirus-related store closures hit sales and profit in the first half of 2020.
Chocolate makers have been facing soft demand as many grocery shoppers focused on stocking up on essential supplies and made fewer impulse purchases during the Covid-19 pandemic.
"We expect organic sales in the full financial year to be around 5% to 7% lower than 2019," the maker of Lindor chocolate balls said in a statement on Tuesday, while it now expects an operating profit margin of around 10%.
The company said the outlook was based on the assumption of no more large-scale lockdowns and a Christmas business similar to last year.
For the first half of 2020, Lindt report organic sales falling by 8.1% to CHF1.53 billion (€1.42 billion), while net profit slid to CHF19.7 million (€18.34 million), from CHF 88.1 million (€82.04 million) in the year-ago period.
Sales were particularly affected by the restrictions on retail trade and the temporary closure of around 500 of Lindt's own shops over Easter, normally a peak season for sales.
The group confirmed its mid-to long-term organic sales growth target of 5% to 7% per year, and said it should be possible to exceed this range in 2021 due to the expected catch-up effect.
Operating profit should return to the level of around 15% in 2022/23, and the operating margin should again improve by 20 to 40 basis points per year in the medium to long term.