Lindt expects U.S. business to weigh on sales growth this year (updated)

Chocoladefabriken Lindt & Spruengli AG

06/03/2018 06:48

(Adds company comment, outlook details, background)
    ZURICH, March 6 (Reuters) - Swiss chocolate maker Lindt &
Spruengli  LISP.S   LISN.S  said on Tuesday it expected organic
sales to grow about 5 percent this year, below its mid-term
target, as difficulties persist in its U.S. business. 
    Confectionery companies have been facing a tough time as
consumers tend to prefer healthier snacks, but Lindt has fared
better than mass-market rivals, helped by its high-margin
premium segment and its retail network.
    However, its U.S. business, including recently acquired
Russell Stover, is facing difficulties and is likely to weigh on
sales growth this year, the maker of Lindor chocolate balls said
in a statement.
    "Given the ongoing strategic realignment of Russell Stover's
product portfolio and the current challenges in the U.S. retail
market, the group expects organic growth of around 5 percent in
the financial year 2018," Lindt said.
    The company confirmed its mid-term outlook for 6-8 percent
organic sales growth and a margin increase of 20-40 basis points
and said it expected the margin to rise in line with this target
this year.
    Net profit rose 8 percent to 452.5 million Swiss francs
($481.79 million) last year.
    Lindt, known for gold foil-wrapped Easter bunnies, also
announced a share buyback programme of up to 500 million Swiss
francs in view of a capital reduction. 
    It proposed to pay out a dividend of 930 francs per
registered share, a 6 percent increase over last year, and said
it intended to maintain its dividend policy.  
    The company, based in Kilchberg on Lake Zurich, already
reported a 3.7 percent rise in 2017 organic sales in January,
its lowest level since 2009.  urn:newsml:reuters.com:*:nL8N1PB0L9

($1 = 0.9392 Swiss francs)

 (Reporting by Silke Koltrowitz; Editing by Amrutha Gayathri)
 ((silke.koltrowitz@thomsonreuters.com; +41 58 306 7454; Reuters
Messaging: silke.koltrowitz.thomsonreuters.com@reuters.net))