Lindt sales and profit fall as COVID-19 hits chocolate appetite (updated)

Chocoladefabriken Lindt & Spruengli AG

21/07/2020 06:43

(Adds details)
    ZURICH, July 21 (Reuters) - Swiss chocolate maker Lindt &
Spruengli  LISP.S  said it expected its organic sales to fall
around 5-7% this year before bouncing back next year after
COVID-related store closures hit sales and profit in the first
half of 2020.
    Chocolate makers have been facing soft demand as many
grocery shoppers focused on stocking up on essential supplies
and made fewer impulse purchases during the COVID-19 pandemic.
    "We expect organic sales in the full financial year to be
around 5–7% lower than 2019," the maker of Lindor chocolate
balls said in a statement on Tuesday, while it now expects a
operating profit margin of around 10%.
    The company said the outlook was based on the assumption of
no more large-scale lockdowns and a Christmas business similar
to last year.    
    For the first half of 2020, Lindt report organic sales
falling 8.1% to 1.53 billion Swiss francs ($1.63 billion), while
net profit slid to 19.7 million francs, from 88.1 million francs
in the year-ago period, Lindt & Spruengli said. 
    Sales were particularly affected by the restrictions on
retail trade and the temporary closure of around 500 of Lindt's
own shops over Easter, normally a peak season for sales.
    The group confirmed its mid-to long-term organic sales
growth target of 5–7% per year, and said it should be possible
to exceed this range in 2021 due to the expected catch-up
effect. 
    Operating profit should return to the level of around 15% in
2022/23, and the operating margin should again improve by 20–40
basis points per year in the medium to long term, the group
said. 

($1 = 0.9390 Swiss francs)
    

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