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Investing.com - Chocoladefabriken Lindt & Sprungli AG shares fell over 6% on Tuesday after the Swiss chocolatier slashed its 2026 organic growth outlook to 4-6% from a longstanding 6-8% target, eclipsing record full-year 2025 sales of CHF 5.92 billion.
Barclays said the cut validated prior concerns on volumes, questioning whether the reduction reflected geopolitical risks or structural pressure from the company’s unprecedented 19% price increase in 2025.
"We question how much of this guidance reduction is due to the ongoing tensions, and how much is due to volume issues which would have been present even without the geopolitical tensions," Barclays analysts said.
Organic sales growth of 12.4% was driven entirely by pricing of 19%, while volumes fell 6.6%. EBIT rose 9.8% to CHF 971 million, with margin improving 20 basis points to 16.4%, in line with consensus. Earnings per share of CHF 3,164 beat consensus of CHF 3,106.
Free cash flow dropped 30% to CHF 446 million from CHF 635 million as cocoa-driven inventory build pressured working capital. Net debt widened to CHF 1.07 billion.
The company proposed a dividend of CHF 1,800 per registered share, above consensus of CHF 1,600, pending shareholder approval. A new CHF 1 billion share buyback program begins June 1, 2026, replacing an existing CHF 500 million scheme ahead of schedule.
North America was the standout, delivering an EBIT margin of 13.7%, beating Barclays at 11.3% and consensus at 12.4%, though Russell Stover declined 6.2%. Europe grew 15.3% organically to CHF 2.96 billion. Rest of World posted 11.7% organic growth but missed on margin at 10.0% against consensus of 14.9%.
For 2026, Lindt guided EBIT margin improvement of 20-40 basis points above 2025. Medium-term annual sales growth remains targeted at 6-8%. The company flagged cocoa price volatility, trade tariffs and geopolitical tensions as key risks.
Barclays noted recent Nielsen data in Europe had shown some improvement and that Lindt was outperforming in the U.S. despite a weak overall chocolate market.
The brokerage maintained its “underweight” rating, flagging volume and margin trends in the second half of 2026 and into 2027 as the critical test.
At CHF 105,000, Barclays’ price target implies a potential downside of 14.2% from Monday’s close.