Lindt cuts guidance in recognition of US slowdown – but organic sales continue to rise
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Lindt cuts guidance in recognition of US slowdown – but organic sales continue to rise

Luxury chocolatier Lindt & Sprungli (Lindt) has warned of a “challenging” environment in Europe and North America, and slashed guidance in what analysts are describing as an “unusual” move for the company. Despite this slash, the company said that organic sales are up by 5% year on year in a recent sales release, which offers a preview of figures that the company will report more fully in March at its scheduled earnings release.

Lindt’s share price has declined by 2% so far this year

graph 30 lindt

Source: Yahoo Finance

Lindt said that saturation in the US and Europe contributed to a challenging environment over its last quarter. The company reported that North American sales growth slowed to 2.8% year on year, down from 4% in the first half of the year. As a result, the company slashed guidance for expected long-term organic sales growth from a range of 6% to 8% down to a range of 5% to 7%.

MainFirst Schweiz AG CEO and consumer goods analyst Alain Oberhuber said: “Although we do not expect any market earnings estimates changes, the lower than the long-term organic sales growth guidance comes as a slight negative surprise.” But he added: “It looks as if the worst is over with the company’s US business, Russel Stover.”

Lindt went on to say that reported sales (which include the impact of currency fluctuations) were up by 5.5% from the year-ago period to 4.31 billion Swiss francs, as the rest of the world segment (and, to a lesser extent, Europe) compensated for the slowdown in the US. The company will report its 2018 results in full on March 5.

Disclosure

Dominion holds Lindt & Sprungli in its Global Trends Luxury Fund.


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