Lindt Sees Better Second-Half With New Russell Stover Chocolatesby
New products expected to reach stores in fourth quarter: CEO
Lindt plans 65 store openings in 2016 to take total near 400
Lindt & Spruengli AG’s outgoing Chief Executive Officer Ernst Tanner said the world’s biggest maker of premium chocolate will introduce new Russell Stover products to make its sales less seasonal and drive an acceleration in second-half sales this year.
The new line is designed for everyday snacking, including items such as chocolate-covered nuts, Tanner said in a phone interview. They should be available in stores in the fourth quarter.
“Russell Stover is very strong in the seasonal business, and we want to build the assortment in a way that the product is consumed permanently,” Tanner said.
Lindt is eliminating some of Russell Stover’s 2,000 articles and is raising prices as it replaces them with new ones. The adjustment will impact growth in the short-term, the Kilchberg, Switzerland-based company said as it reported first-half earnings on Friday. Russell Stover gets more than three-quarters of its annual revenue from Christmas, Easter and Valentine’s Day purchases, according to Jon Cox, an analyst at Kepler Cheuvreux in Zurich.
First-half operating profit advanced 8.6 percent to 98.4 million francs ($100 million), the company said Friday. Analysts expected 100.5 million francs. Sales rose 4.4 percent on an organic basis, trailing the 5.1 percent consensus, according to Alain Oberhuber, an analyst at MainFirst Bank AG.
Sales climbed 6.6 percent to 1.5 billion francs. In its ambition to overtake Godiva as the world’s biggest retailer of premium chocolate by 2020, Lindt plans to open 55 to 65 new stores this year, Tanner said, adding locations in North America, Brazil and Japan. That will bring the total network to almost 400 stores. Godiva runs more than 450 boutiques.
The stock was down 0.2 percent at 10:15 a.m. in Zurich trading.
The maker of Lindor chocolate balls repeated its mid-to-long-term organic sales growth forecast of 6 percent to 8 percent.
The maker of chocolate Easter bunnies wrapped in golden foil last month picked finance chief Dieter Weisskopf to become chief executive officer, replacing Ernst Tanner who will focus on his role as chairman. Tanner in March forecast that growth would improve in the second half.
Lindt became the third-largest chocolate maker in America after its Russell Stover acquisition in 2014.