Lindt heads for worst quarter in 17 years on price-hike fallout

Published Mon, Jun 29, 2026 · 03:22 PM

LINDT & Spruengli AG’s shares are on track for their biggest quarterly loss in 17 years as consumers tire of higher chocolate prices, signalling that the Swiss confectioner’s strategy of passing on the cost of cocoa may be running out of room.

The company’s participation certificates recently bounced off four-year lows but are still down 15 per cent from the end of March. The chocolatier is set for its worst quarterly showing since 2009, when it grappled with the fallout from the global financial crisis.

Lindt, known for its golden foil-wrapped Easter bunnies, has seen its sales volumes erode after raising prices last year by nearly 20 per cent on the back of surging cocoa prices.

In March, it was forced to cut its guidance for organic sales growth, seeing it at 4 per cent to 6 per cent for 2026, down from a previous forecast of 6 per cent to 8 per cent. It said the Iran war will impact transportation and packaging prices, and further depress consumer sentiment in the US and Europe.

The change in investor sentiment comes after Lindt, which positions its products in the premium segment, had previously been the sector’s darling. It had outperformed peers such as bulk chocolate maker Barry Callebaut AG which saw volumes hit hard by higher cocoa prices. US peer Hershey has also had a tough quarter, with its stock falling 14 per cent.

Now that those prices have normalised, Lindt’s stock market fortunes appear to have reversed.

Cocoa futures have retreated close to 60 per cent since an all-time high reached in December 2024. Yet, they locked in their biggest weekly gain last week since November 2020 as mounting concerns over next season’s crop triggered a wave of short covering.

“Premium positioning doesn’t shield the business when prices rise 19 per cent in a single year; if anything, it delays the volume recovery, as consumers who traded out of premium take longer to return,” Morningstar analyst Svetlana Menshchikova said. Still, she added that she doesn’t see any signs of “structural deterioration in Lindt’s brand equity or competitive positioning.”

Price increases that backfire are a common tale for European consumer companies.

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Luxury conglomerates like LVMH and Gucci owner Kering SA are still recovering from a slump in demand after excessively hiking prices during the Covid-19 sales boom, as consumers have cut back on voluntary spending amid a higher cost of living.

The earnings growth of the consumer discretionary category trailed all other European sectors in the first quarter.

Some market participants, meanwhile, wonder whether there are more negative surprises ahead for Lindt. Short interest has more than doubled since March, while Bloomberg-tracked analysts are split, with five buy ratings and six sell ratings on the stock.

“There are investor concerns that Lindt could even miss the 4 per cent,” said Kepler Cheuvreux analyst Jon Cox. “If first-half results come in looking fragile, there’s a risk of continued multiple compression,” he said, pointing to the company’s historically high valuation.

European consumers in particular appear to have been unwilling to swallow the price hikes, according to Bank of America analyst Antoine Prevot. The region is expected to be the main drag in the upcoming earnings print, offsetting strength in North America and Rest of World geographies, he said.

Jefferies analysts including Feng Zhang, who initiated coverage at underperform last week, said Lindt will need more price cuts to restore competitiveness and could expect a “reality check” regarding its mid-term growth.

The company has guided for overall mid-single-digit price increases over the current year, though it plans to backtrack on previous price increases in some regions.

“Although the recent decline in cocoa prices will not affect us until 2027 due to our long-term procurement strategy, we are already lowering prices in Switzerland and Germany in certain cases as early as 2026,” a Lindt spokesperson said in an emailed statement last week.

On Friday, the company declined to comment on the quarterly price move due to being in a quiet period.

While the price of cocoa futures has roughly halved since last year, the threat from a strong El Niño, the periodic warming of the central and eastern Pacific Ocean, is expected to cause additional volatility in prices, adding pressure onto the Kilchberg, Switzerland-based company. 

Lindt’s premium mix appears less protective as price hikes hit consumer demand, Bloomberg Intelligence analyst Ignacio Canals Polo said in a note. While its premium positioning might support higher pricing, Lindt will need to be careful to balance this against volume elasticity and potential switches to lower-priced brands, he wrote.

Still, in a sign that better times might be on the horizon, Morningstar’s Menshchikova pointed to competitor Barry Callebaut’s forecast earlier this year for sales volumes to rebound over the next 18 months.

“We believe a similar trajectory for Lindt in the second half is plausible as cocoa price normalisation feeds through to retail pricing and consumer confidence gradually rebuilds,” Menshchikova said. BLOOMBERG