Financial results

Lindt warns of further price hikes after posting rise in profits

By Anthony Myers

- Last updated on GMT

Pic:  Lindt & Spruengli
Pic: Lindt & Spruengli

Related tags Lindt & sprüngli Chocolate Cocoa financial results

Luxury Swiss chocolate maker Lindt & Spruengli has posted stronger-than-expected operating profits in the first half of 2023 and raised its full-year outlook, after hiking up prices for its chocolate easter bunnies and pralines.

In a statement to the media, it said higher prices helped overall sales to trend upward after sales volumes ‘stagnated or declined slightly’ in some products and markets due to consumer spending strains and inflationary pressure.

The company’s earnings trend suggests price-sensitive consumers are still willing to buy occasional special treats, while holding back on quantity. Maintaining the image of ‘affordable luxury’ is a balancing act that might turn out crucial for the chocolate maker as it faces soaring commodity costs, including for cocoa and sugar, Bloomberg also reported.

As ConfectioneryNews reported earlier this week​ the surging costs of cocoa and other raw materials have forced chocolate makers like Lindt to pass on price increases to trade partners.

The rise in cocoa prices since the end of last year “is so significant that it outstrips the slight easing seen in some other raw materials​,” Lindt said, adding it’s prepared to “monitor the situation on the commodity markets closely for the rest of the year​.”

The company’s first-half operating profit jumped to 255 million Swiss francs ($293 million), topping the 201 million francs analysts had expected. Lindt revised its 2023 forecast to project sales growth of 7% to 9%. It expects its full-year profit margin to widen by up to 50 basis points.

Its improved outlook indicates that Lindt expects to be able to continue passing on these costs to consumers in the future. High-value products such as its golden Easter bunny are key to that strategy, according to Bloomberg Intelligence. 

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