Swiss chocolatier Lindt & Sprüngli has cut its 2017 revenue forecast owing to difficulties in its US operations in the first half of the year.
North American sales fell by 3% on a like-for-like basis in the first six months of the year. The shortfall is said to be a result of the strategic realignment of confectionery company Russell Stover, which Lindt acquired in 2014.
Lindt said the overhaul of the business will ‘take more time than originally anticipated’. The company also put the disappointing figures down to increasing healthy snacking trends among consumers.
In a statement, Lindt said: “Due to current developments in North America, it is anticipated that revenue growth for the full year will be slightly lower than in the previous year, combined with an increase of the operating profit margin. However, the group is still confident that its growth will considerably exceed the industry average.”
As a whole, Lindt & Sprüngli’s sales rose to CHF 1.55 billion ($1.63 billion) – which represents a growth rate of 3.6%, down from 6% in 2016.
Stronger performance was recorded in Europe, which grew by 6%, with subsidies in the UK and Germany showing ‘very good results’. The rest of the world segment, which includes the emerging markets of Brazil, China and South Africa, grew by 14%.
The company also boosted its global retail network with 20 openings and now includes over 390 shops. Lindt remains hopeful that it will be able to make up for its shortfalls in the US.
Lindt & Sprüngli CEO Dieter Weisskopf said: “Thanks to its premium positioning and, in particular, its leading position in products with high cocoa content, Lindt & Sprüngli is very well placed to meet the requirements both of the trade and its consumers.”
The company plans to relaunch Russell Stover’s sugar-free line in the second half of the year in a bid to kick-start growth.
© FoodBev Media Ltd 2017