Lindt & Sprüngli Swallows Bitter Pill as Price Cuts Follow 19% Hike

Lindt cuts prices up to 20% in Europe after 19% price hike caused 6.6% sales drop. Stock near 52-week low, buyback fails to lift shares.

The premium chocolate maker that once commanded double-digit price increases is now slashing prices across Europe. Lindt & Sprüngli’s shares closed at €9,950 on Friday — just 0.71% above their 52-week low and 31.47% below last year’s high — as investors digest the consequences of a pricing strategy that backfired spectacularly. A CHF1 billion buyback launched in May has done nothing to stem the slide.

Retail revolt forces a rethink

After raising prices by an average of 19% last year, Lindt saw global sales volumes contract by 6.6%. In Germany, its second-largest market after the US with €937 million in annual revenue, volumes fell by more than 15%. The backlash has been severe enough to force a dramatic reversal. In Switzerland, selected products such as Connaisseurs pralines, Kirschstängeli and the Lindt teddy are now up to 20% cheaper. In Germany, the recommended price for a 100-gram bar of basic milk chocolate has dropped from €2.69 to €2.19, with Christmas figures falling from €8.99 to €7.99. Further adjustments are planned for the second half.

Retailers have piled on the pressure. Rewe chief executive Lionel Souque publicly accused Lindt and Mondel?z of failing to pass on lower cocoa costs. Even a 25% Easter discount funded jointly with Edeka failed to shift stock — a warning sign that the brand’s pricing power has limits.

Travel turbulence and cocoa hangover

The airport business, traditionally a high-margin channel, is suffering from a slump in tourist traffic. CEO Adalbert Lechner pointed to missing visitors at hubs like London, Paris and Vienna, attributing the weakness to the Middle East conflict. That segment typically generates far better margins than supermarket shelves, making the revenue gap even more painful.

On the cost side, relief from falling cocoa prices is slow to arrive. Lindt has hedged its cocoa requirements for 2026 at elevated levels, locking in expensive inputs. CFO Martin Hug wants to run down the CHF320 million inventory quickly, targeting a free cash flow of roughly 10% of sales. Cocoa warehouse stocks built up last year are now a drag on working capital.

Muted outlook and a crucial test

Management has already pared back expectations. For 2026, organic sales growth is forecast at 4% to 6%, and the operating margin is expected to improve by 20 to 40 basis points — a sharp revision from the stronger growth signalled in January. Volume declines are likely to persist in the first half of the year before a recovery begins in the second half. The half-year report due in July will be the first major check.

The buyback programme, which runs until April 2029, has so far failed to lift the stock. With the share trading well below its 50-day moving average of €11,404.60, investor sentiment remains dour. Lindt must now prove that lower prices can win back market share — and the upcoming Christmas season will be the acid test.