Price hikes boost Lindt sales, says more to come

By Paolo Laudani

(Reuters) -Swiss chocolate maker Lindt & Spruengli reported a 7% jump in its half-year organic sales on Tuesday, as customers bore the brunt of the historically high cocoa prices.

The maker of chocolate bunnies and teddy bears reported organic sales of 2.16 billion Swiss francs ($2.43 billion) for the first six months of the year, while analysts polled by LSEG were expecting 2.1 billion francs.

Price increases in the mid-single-digit percentage range contributed to the sales growth in the period, while volume/mix growth was broadly flat, the company said.

Lindt added it would need to hike prices further, as cocoa prices have more than doubled this year due to limited crop supply and are now higher than those of many metals.

It confirmed the full-year outlook for organic sales growth of between 6% and 8%, and said it expects its operating margin improvement to be at the upper end of the previous guidance for a 0.2 to 0.4 percentage point increase.

"The company has a strong track record in managing input cost inflation and has all the levers in place to further increase returns, as demonstrated by these results," Vontobel analyst Jean-Philippe Bertschy said in a note.

Lindt also said a legal dispute in North America had a positive one-time impact on the results. Bernstein analysts noted it was not clear whether this was factored in the annual guidance.

The maker of Lindor chocolate balls said it would launch a new share buyback programme of up to 500 million francs from Aug. 2, to run until the end of July 2026 at the latest.

It had completed a previous buyback of almost 1 billion francs in March.

While the new plan has a lower target, Bernstein wrote in a note that it expects Lindt to shift to a steady continuous buyback programme going forward.

Shares in Lindt were broadly flat at 0930 GMT.

($1 = 0.8888 Swiss francs)

(Reporting by Paolo Laudani, additional reporting by Marleen Kaesebier in Gdansk; editing by Milla Nissi)