Upmarket chocolate maker Lindt & Sprungli warned today (17 March) that its profits would tumble this year as the downturn hits demand for high-end chocolate.
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The Switzerland-based firm, which today reported a 3% rise in 2008 operating profit to CHF361.2m (US$305.7m), forecast that 2009 operating profit would reach CHF260-280m.
Lindt pointed to high cocoa costs, volatile foreign exchange and weak consumer confidence for the gloomy forecast.
“The aggravation of the economic conditions will grow more acute in the current year and affect the situation on the employment markets, which will have a negative impact on consumer sentiment,” Lindt said.
Nevertheless, the company is looking to stick to its marketing plans or even up spending in markets with “high growth potential”. Lindt also said it would invest in its US production facilities and revamp its retail chain the country.
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By GlobalData“Based on these measures, the profitability of US activities will improve in the future and allow Lindt & Sprüngli to even force the pace of its growth strategy in the world’s biggest chocolate market,” the company said.
Looking at its 2008 results, Lindt booked a5.8% rise in revenues to CHF2.94bn, with net income up 4.4% to CHF261.5m.
Net income margins were up by 40 basis points and Lindt said it was “especially pleasing” that its namesake and Ghirardelli brands were the “fastest-growing chocolate brands” in the US.
