ZURICH (Reuters) - Swiss chocolate maker Lindt & Spruengli said on Tuesday it expected organic sales to grow 5-7 percent this year, in line with mid-term targets, as it works to improve the performance in its North American unit.
Chocolate makers are grappling with saturated European and U.S. markets and a trend towards healthier snacking, but Lindt is growing faster than peers as it taps new markets in Asia and Africa and expands its own retail network.
It is, however, taking more time to turn around its Russell Stover business it had bought to boost its position in the United States, and had to trim its mid-term guidance to 5-7 percent organic sales growth in January when it released 2018 sales figures.
The maker of Lindor chocolate balls said it had made substantial investments in North America “to lay the foundation for profitable sales growth”, but did not say whether it expected improvements starting this year.
Net profit rose 7.6 percent to 487.1 million Swiss francs ($487 million) in 2018, in line with expectations in an Infront Data poll, the company known for its gold foil-wrapped Easter bunnies said in a statement.
It proposed to pay out a dividend of 1,000 Swiss francs per registered share, an increase of 7.5 percent over last year, and also in line with forecasts. It had already reported a 5.1 percent increase in organic sales in January.
Kepler Cheuvreux analyst Jon Cox said the group margin was slightly below consensus dragged down by a 240 basis point decline in North America. “Lindt is clearly still in the middle of repositioning Russell Stover,” he said.
Reporting by Silke Koltrowitz