Lindt finally sees success in North America
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Lindt finally sees success in North America

Swiss chocolatier Lindt & Spruengli (Lindt) reported earnings for the first half of 2018 this week, reiterating its annual growth target and reassuring investors that the previously difficult North American market was finally improving. That’s not to say Lindt has nothing to worry about – the trend towards healthier snacks is impacting confectionary companies across the board – but Lindt is demonstrating that its business is robust… and still growing.

Lindt’s share price has risen by 17% so far this year

graph 2507 lindt

SOURCE: Yahoo Finance

Lindt said that net profit for the six months rose by 13% year on year to 86 million Swiss francs, overshooting analysts’ forecasts for 84.3 million. This was down to strong organic sales growth: +5.7% against the first half of 2017. This is also an acceleration, given that Lindt logged 3.7% in the fourth quarter of 2017. Perhaps the best news, for Lindt’s long-term followers, is an improvement in the U.S. market, where its acquisition of Russell Stover had been weighing it down.

The company said that Russell Stover has managed to stabilize its sales with “only a modest dip in the first half”. Hence, organic growth in North America grew by 4% in the first half of the year – admittedly, this is against a pretty friendly comparable period, as 2017 was rough.

Lindt confirmed that it’s hoping to grow about 5% organically over the years, and reiterated its medium-to-long term growth targets of 6% to 8%. With America looking sweeter, there’s every indication that Lindt is feeling confident on its ability to deliver.

Disclosure

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


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